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Macro Economic Picture for February 5, 2017 (Superbowl Sunday)

MARKET SUMMARY

– Market overcomes the gap lower as NASDAQ, SOX push to new highs.
– A few more negatives face stocks, but the upside bias is still winning
out.
– Not just typical stories are impacting stock movement, at least on a
temporary basis.
– Still plenty of good patterns. Plenty.
– Jobs Report shows a jump in full-time in January, anticipating ACA repeal.
– Earnings revert to a familiar pattern: lots of top line misses. Lots.
– Every day is an adventure as to what is coming from the administration and
how the market will take it. Even so, the market found support and moved
back up.

The past two weeks saw the stock indices break higher out of 6 week ranges to new highs, give that move back 3 sessions later, then rally back to try for new highs again. A breakout, a breakout rejection, then new bids.  Volume sluggish at best, unusual for a new year. Bullish advisor sentiment hit a cycle high at 61.8%, making it 3 of 5 weeks over 60%. Historically, that has marked a rally top and led to deeper corrections.

Our Take

The macro economic picture for Super Bowl Sunday, February 5, 2017, is interesting.  The market enjoyed a strong jobs report on Friday and an up day.  Essentially on weak volume and the report itself is not as strong as one might think.  Much of the current up move is on Trump anticpated changes, including Affordable Care Act repeals.

Most noteworthy on this week’s Investmenthouse.com weekend update is 3 of the last 5 weeks have shown a Bull VS Bear reading with bulls above 60.0, which indicates a market top in the face of a more serious correction (read possible bear market).  With VIX resting at 10.97, we very well may be within a week or two of a more serious correction.  That being said, there may be a rise in stocks in the short term.  Beware, any perceived problem with the economy; the world political picture (North Korea, Iran…) could send stocks reeling.

Head on over to Investmenthouse.com and read their weekend update:  Click Here for Weekend Update at Investmenthouse.com

They are always the best source I’ve found for a glimpse into the macro economic state of the world and America.

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