Market Direction Mid Week Update©

Market Direction: BULLISH alert issued 11/10/2016

The S&P 500 gained ground for a fifth consecutive session Wednesday to close at a record as minutes of the Federal Reserve’s latest policy meeting showed broad agreement on plans to begin shrinking the central bank’s balance sheet and also pointed to a likely rate increase next month, as widely expected.

The S&P 500 SPX, +0.25%  rose 5.97 points, or 0.3%, to close at 2,404.39. The Dow Jones Industrial Average DJIA, +0.36%  also rose for a fifth straight day, gaining 74.51 points, or 0.4%, to finish at 21,012.42, just 0.5% below its record close set on March 1. The five-day run is the longest winning streak for both the S&P and the Dow since February.

The Nasdaq Composite Index COMP, +0.40% climbed 24.31 points, or 0.4%, to end at 6,163.02.

The minutes of the early May meeting showed that members were in agreement on a general approach to unwinding the massive balance sheet built up over the course of the asset-buying spree that was at the center of the Fed’s quantitative easing strategy. The minutes also showed most Fed officials agreed it would “soon” be time to raise rates again.

Read: Seeing another rate hike ‘soon,’ Fed outlines plan to reduce bondholdings

“The unwind in the Federal Reserve’s balance sheet holds Chair Yellen’s signature gradual approach; she will not allow a quick unwind, nor anything that surprises markets,” said Quincy Krosby, chief market strategist at Prudential Financial, in emailed comments.

Caution had been slightly elevated after Moody’s Investors Service cut China’s foreign credit rating for the first in nearly three decades. However, stocks in China erased losses and closed slightly higher, while European stocks also shook off early weakness and traded in positive territory.

Read: Can investors afford do shrug off China’s credit downgrade?

In other central bank events on Wednesday, Dallas Fed President Rob Kaplan will participate in a moderated discussion at an event in Toronto at 6 p.m. Eastern. Minneapolis Fed President Neel Kashkari participates in a town hall discussion in Ashland, Wis., at 6:30 p.m. Eastern.

On the economic front, existing home sales fell 2.3% in April, coming in below expectations as lean inventory constrained demand.

$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, email us. Share with a friend.

The all-time highs since our initial recommendation to go LONG this market. Here is how the markets have performed:

Stock Market Direction Recommendation (11/10/2016)
Dow	up 2,361.23 points a 12.55% gain	3/1/17
Nasdaq	up 961.36 points a 18.46% gain	5/16/17
S&P 500	up 238.29 points a 10.99% gain	5/16/17

Related Link: http://www.stockmarket-direction.com/