Market Direction Weekly Closing Numbers©

Market Direction: BULLISH alert issued 11/10/2016

The economy

The stock market spent the final session of the year in a steady retreat. The S&P 500 lost 0.5%, narrowing its 2016 gain to 9.5%. The Nasdaq (-0.9%) underperformed, trimming this year's advance to 7.5%.

The bulk of the day saw below-average trading volume, but there was a surge of activity into the close, likely associated with end-of-month and end-of-quarter flows from large investors. As a result, more than a billion shares changed hands at the NYSE floor.

Today's pullback brought the S&P 500 back into the middle of its post-election range with nine out of eleven sectors finishing in the red. Heavily-weighted technology (-1.0%) and consumer discretionary (-0.9%) spent the day at the bottom of the leaderboard, dragging most other sectors down.

Treasuries ended the abbreviated session on a higher note. The 10-yr yield slipped three basis points to 2.44%, ending 20 basis points below its mid-December high.

The U.S. Dollar Index (102.28, -0.38) shed 0.4% to lock in its second consecutive decline, but still ended the year just below a 14-year high. It is possible that market participants got an early taste of the strong dollar's impact on the manufacturing sector as the December Chicago PMI declined to 54.6 from 57.6 in November. The drop was paced by New Orders, which fell to 56.5 from 63.2 in November. To be fair, the overall index pulled back from levels not seen since January 2015 and over half of the respondents to a special question pertaining to the 2017 outlook said they expected their business to prosper, aided by tax reforms and deregulation.

Bond and equity markets will be closed on Monday and Tuesday's economic data will be limited to the 10:00 ET release of November Construction Spending (Briefing.com consensus 0.5%) and December ISM Index (Briefing.com consensus 53.6).

Happy New Year!

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By the numbers the weekly closing index numbers compared to the initial BULLISH recommendation closing numbers: 

Stock Market Closing Numbers
compared to Recommendation Numbers
	11/10/2016	12/30/2016	Difference
Dow Jones	18,807.88	19,762.60	954.72
Nasdaq	5,208.80	5,383.12	174.32
S&P 500	2,167.48	2,238.83	71.35

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