Market Direction Week of March 13, 2017©

Market Direction: BULLISH alert issued 11/10/2016

Last Week Review: The current bull market passed another milestone, marching past the eight-year mark earlier this week. The S&P 500 has increased by more than 250% since the market bottom on March 9, 2009. This increase has been driven by earnings growth along with expansion of the S&P 500's price-to-earnings ratio, which has increased to 18.4 times the next 12 months' earnings and is above average levels. While high valuations can be concerning for some investors, we do not currently see the makings of a bear market in the near future.

Stocks declined modestly on the week, breaking their six-week streak of gains. Energy stocks led decliners, following oil prices lower. However, the week ended on a positive note as a result of a solid February jobs report. Overall, the backdrop for stocks remains favorable, supported by improving economic growth expectations and earnings growth. However, uncertainty regarding upcoming policy changes is likely to cause spikes in volatility.

How the market finished last week, the S&P 500 down 0.4%, the Nasdaq down 0.2%, and the Dow down 0.5%.

This Week: Equity markets have been struggling to hold on to gains at the time of this writing (1:50 PM ET) as the Dow Jones Industrial Average (DJI) is currently up 15 to 20,874, the NASDAQ Composite (COMPX) up 8 to 5,846 and S&P 500 (SPX) up 2 to 2,367. All of the major indices have traded briefly in negative territory so the price action seems to be suggesting that a cautious stance may be warranted. I know that the markets have largely been in “melt-up mode” ever since the election and essentially any sell-off has been met with buying, but I think I’ve seen enough technical signals to support a cautious stance moving into next week, especially with the potential for some added volatility around the mid-week FOMC rate decision.

Economic Calendar: Producer Price Index (3/14), Consumer Price Index (3/15), Retail Sales (3/15), FOMC Rate Decision (3/15), Michigan Sentiment (3/17)

Some of the major earnings announcements on deck: YY, ORCL, DG, ADBE TIF.

$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, write us. Share with a friend. Cha-ching.

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