As of Thursday, November 10, 2016 at the close of trading EquitySurge™ has continued a strong buy signal for USA equities.
Thursday’s stock market action included a new all-time-high for the Dow Jones Industrial Average in a continuation of the massive rally following the successful resolution of the presidential election. There was also a large rotation out of interest rate sensitive stocks and the former market leaders, large technology stocks. The market is beginning to favor growth oriented stocks, banks, manufacturers, defense companies, and biotechs. This sector rotation could continue for the next few days as portfolios are reallocated.
So far the market seems to be confirming a “V-Bottom” straight back up from the lows leading up to the election. This means the S&P500 Index could quickly reclaim the Summer highs around 2194 and then breakout higher from there. However, bonds are selling off (prices down, yields rising), and they are doing so at a torrid clip since the end of the election. We will have to watch this closely because if yields rise too fast it will have a negative effect on stocks.
Support on the S&P500 Index is still strong at the 2050 level, so if prices revisit this level in the very near term as the large sector rotation continues, it is a nice area to buy or add to longs. Targets are 2194 first, and then 2250, 2300 and perhaps higher into the end of the year.
If you would like to review the EquitySurge™ trading signals generated so far in 2016 please see the Trading Signal Performance Chart page.