US STRATEGY – HOLIDAY MOMENTUM

The path of least resistance continues to be higher. 

 

Yesterday, the S&P 500 finished higher (+0.2%) for a fourth consecutive day.  The MACRO calendar provided some headwinds to the market, while technology earnings continue to surprise to the up side. 

 

November new home sales declined 11% from last month to an annualized 355,000.  This was well below the 438,000 consensus and was the lowest level seen since April.  As a result, inventory now stands at 7.9 months versus 7.2 last month.  Also on the MACRO calendar, the November income data showed that income increased less than expected last month while the final U. of Michigan consumer confidence survey came in at 72.5 versus the 73.8 consensus. 

 

Materials, Energy and Consumer Discretionary were the best performing sectors yesterday.  Continuing the trend from yesterday, small cap stocks outperformed, with the Russell 2000 improving 1.2%.  The VIX moved slightly higher on the day and the dollar index declined 0.45%. 

 

Within the Technology sector, RHT and TIBX both announced better than expected earnings yesterday.  Continuing with our theme that some sectors of the economy are doing better than others, revenues trends seem surprisingly strong for this pre announcement season. 

 

Underperforming the market were Consumer staples, Healthcare and Financials. 

 

From a risk management standpoint, the ranges for the S&P 500, the Dollar Index and the VIX are seen in the charts below.  The range for the S&P 500 is 15 points or 0.5% upside and 1.0% downside.  At the time of writing, the major market futures are slightly higher.

 

The CRB improved by 1.5% yesterday; grains, energy metal and industrials all traded higher on the day.

 

Crude oil is unchanged after a larger-than-expected decline in U.S. stockpiles.  The Research Edge Quant models have the following levels for OIL – buy Trade (75.52) and Sell Trade (77.16).

 

Gold improved by 1.3%to $1,101.98 an ounce in Singapore.  The Research Edge Quant models have the following levels for GOLD – buy Trade ($1,071) and Sell Trade ($1,151). 

 

Copper climbed to the highest price in almost three weeks in London as the dollar declined.  The Research Edge Quant models have the following levels for COPPER – buy Trade (3.16) and Sell Trade (3.26).

 

 

 

US STRATEGY – HOLIDAY MOMENTUM - spx

US STRATEGY – HOLIDAY MOMENTUM - dxy

US STRATEGY – HOLIDAY MOMENTUM - vix

US STRATEGY – HOLIDAY MOMENTUM - gold

US STRATEGY – HOLIDAY MOMENTUM - oil

US STRATEGY – HOLIDAY MOMENTUM - copper