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6 January 2017 – Weekly Review – Setup for a breakout


The Dow Jones Industrial, Nasdaq 100 and S&P 500 broke out to new all-time high this week. There are Squeezes (volatility compression) in the indices and it points to further breakouts to new high. Healthcare and commodities are sectors that money has rotated into.

Economic Data
Nonfarm Payrolls for December rose 156K below an estimate of 175K. The prior month was revised upward from 178k to 204k. Participation rate rose from 62.6% to 62.7%. The unemployment rate rose from 4.6% to 4.7%. Hourly earnings rose 0.4%. Non-farm private payrolls rose 144K versus 198K for the previous month.

U.S. trade deficit rose almost 7% in November as imports hit the highest level in nearly a year and a half. The deficit climbed to -$45.2 billion from a revised -$42.4 billion. Imports increased 1.1% to $231.1 billion in November.

Factory Goods Orders for November fall -2.4% and orders for October were revised up to 2.8%. Durables orders for November fall -4.5% after rising 5% in October Consumer goods shipments for November fall 0.2% after rising 0.9% in October. Consumer goods new orders for November fall 0.3% after rising 0.8% in October.

Indices (Weekly chart)
Dow Transportation closed with a doji candle at 9104.08 above its 8 EMA. Weekly trading range was 189.829. Weekly momentum remains upward. BuySellTimer remains on its positive cycle.

Dow Industrial closed with a small doji candle at 19963.80 above its moving averages. Weekly trading range was 223.7. It touched a high of 19999.63. Momentum remains upward. BuySellTimer remains on its positive cycle.

Russell 2000 closed with an inverted candle at 1367.2814 above its moving averages. Weekly trading range was 136.177. Momentum is upward. BuySellTimer remains on its positive cycle.

Nasdaq 100 closed with a bullish marubozu candle above its moving averages at 5007.0766. It broke out to new all time high at 5020.7. Weekly trading range was 136.177. Momentum remains upward. BuySellTimer is in its positive cycle. The index is in a weekly and monthly Squeeze.

S&P 500 closed with a bullish candle above its moving averages at 2276.98. Weekly trading range was 36.969. Momentum is still upward. BuySellTimer remains on its positive cycle.

Metals and Commodities (Weekly charts)
WTI Crude oil futures (CL) closed with a spinning top doji candle above its moving averages at $53.70 per barrel. Weekly trading range was $3.13. It needs to break through the upfractal at 54.51 to continue on its uptrend. Momentum remains upward. BuySellTimer remains on its positive cycle.

Gold futures (GC) closed with a bullish candle below its 8 EMA at $1172.90. Weekly trading range was 39.4. Momentum remains downward. BuySellTimer has crossed into positive cycle.

Silver futures closed with a bullish candle on its 8 EMA at $16.515 per ounce. Weekly trading range was 0.825. Momentum remains downward. BuySellTimer is neutral.

Agriculture (DBA) ETF closed with a bullish candle above its 21 EMA at 20.34. Weekly trading range was 0.525. Momentum is upward. BuySellTimer has crossed into positive cycle.

Commodities (DBC) ETF closed with a small candle above its moving averages at 15.83. Weekly trading range was 0.394. Momentum is upward. BuySellTimer is in its positive cycle.

Bonds (Weekly charts)
Bond futures (/ZB) closed with a spinning top doji candle below its 8 EMA at 151’23. Weekly trading range was 4.218. Momentum is upward. BuySellTimer is neutral.

High Yield bond ETF (HYG) gapped up and closed with a spinning top doji candle above its moving averages at 87.23. Weekly trading range was 0.719. BuySellTimer is in its positive cycle.

Currencies (Weekly charts)
The dollar index closed with a bearish spinning top doji candle above its moving averages at 102.185. Weekly range is 2.519. Momentum remains upward. BuySellTimer remains in its positive cycle.

EUR/USD closed with a big spinning doji candle below its moving averages at 1.05294. Weekly trading range was 0.028. Momentum remains downward.

USD/JPY closed with a big spinning top doji candle above its moving averages at 117.006. Weekly trading range was 3.536. Momentum remains upward.

Relative Strength – Sectors
On a monthly lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLV, XLK and XLU respectively.

On a 3-monthly lookback, the relative strength order of the ETFs that are outperforming the S&P 500 are XLF, XLE, XLI and XLB respectively.

Market Internals
Vix closed at 11.32. Vix futures is at 12.875. Skew is at 123.67. Market sentiment is bullish. Market breadth is sloping upward. Volumetric accumulation/distribution is sloping upward.

The Week Ahead
Market internals are showing strength. Healthcare has staged a breakout. The prognosis is for the market indices to breakout to new highs.

Stock of the Day
The Stock of the Day is ADBE. Adobe Systems Incorporated is a software company. The Company offers products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences.

 

To YOUR wealth!

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