As of Thursday, October 27, 2016 at the close of trading EquitySurge™ has continued a strong buy signal for USA equities.
Stocks had another weak day today with the S&P500 Index closing down 6 points at the 2133 level. Of note today was the sell-off in government bonds along with the corresponding rise in yields. It seems the bond market is taking note that it’s time for a new period of higher yields, accompanied by the Fed raising rates, which could occur before the end of 2016.
What’s different this time around for a potential Fed interest rate increase is that stocks are holding in a narrow trading range near the recent all-time-highs, which may mean that the stock market is ready for rising rates, which bodes well for increasing economic activity and the beginning of the end of 9 years of aggressive Fed monetary policy intervention and extreme accommodation for financial markets. We’ll have to see what’s in store over the coming weeks and months, but the liquidity indicators remain at extremely bullish levels of support for higher stock prices, which means that money flow into the stock market is very robust, and this money flow is the fuel the market needs to launch a new leg higher in prices.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.