The week that was…
This rally is getting long in the tooth so simply from a duration standpoint some caution is merited. There are other reasons which we will outline later. That said this particular week was a quiet group of sessions with mild gains and losses mixed in; the market was closed on Monday. Earnings were the focus of the week as was the Trump speech Friday where investors may begin to start pivoting off hope for everything to be perfect, and start looking at the reality of Washington D.C. doing Washington D.C. things. Even with 1 party controlling both major branches.
Overseas, the European Central Bank, as expected, left interest rates unchanged Thursday. The decision was expected after the ECB last month decided to extend its bond buying program through the end of 2017. ECB head Mario Draghi said there was “no convincing upward trend in underlying inflation” adding the central bank was ready to expand its quantitative-easing program if needed. His comments pushed the euro and the yen lower against the dollar.
On the economic front, the consumer-price index, a widely watched gauge of inflationary pressure, showed price growth accelerated in 2016 at the fastest pace since 2011. In December, the index rose 0.3%. Excluding the volatile food and energy categories, prices rose 0.2%.
This was another week “Dow 20K” was not attained; and in fact we might have just seen a bearish double top.Continue reading