Market Direction Weekly Closing Numbers©

Market Direction: BULLISH alert issued 11/10/2016

The economy

The stock market endured another range-bound week, which ended with the market remaining just below its record high from January 6. The S&P 500 shed 0.2% for the week while small caps underperformed, sending the Russell 2000 lower by 1.4%.

Bond and equity markets were closed on Monday for Martin Luther King Jr Day while the remainder of the week featured a sideways drift ahead of Friday's inauguration of Donald Trump as the 45th President of the United States. The stock market enjoyed a big post-election rally on hopes that deregulation and policies introduced by the new administration would boost economic growth.

However, with the S&P 500 soaring nearly 7.0% in the month that followed Election Day, the past five weeks featured range-bound trade.

Only three sectors ended the week in negative territory with two registering weekly losses larger than 1.0%. The financial sector lost 1.6% for the week, but the decline took place after the sector soared nearly 20.0% in the five weeks after the election. The health care sector also underperformed, but the countercyclical group remained in the green for the month (+1.3%) despite surrendering 1.5% last week.

On the upside, consumer staples (+1.9%) and telecom services (+0.8%) recorded solid weekly gains. In the staples sector, Procter & Gamble (PG) jumped 3.3% on Friday after beating earnings expectations and raising its organic sales growth guidance.

Rate hike expectations solidified a bit with the fed funds futures market projecting a 70.3% implied likelihood of a rate hike in June, up from 69.0% at the end of last week.

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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	1/20/2017	Difference
Dow Jones	18,807.88	19,827.25	1,019.37
Nasdaq	5,208.80	5,555.33	346.53
S&P 500	2,167.48	2,271.31	103.83

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