November got off to a strong start early last week, and the rally broadened to include financial and retail stocks. But after a torrid six weeks of bullish behavior while ignoring (or perhaps reveling in) concerns about the global economy during, U.S. stocks encountered some strong technical resistance in the middle of last week, and it has continued into Monday. The Dow Jones Transportation Index continues to a drag on the overall market, and this segment will need to gather some enthusiasm if the broader indexes are to resume their advance.

January was a good month for the market as the S&P 500 reached a new 5-year high at 1498, up about 5% for the month.  February has started strong, up yet another 1%. Mid-caps dominated the month along with Small-caps, but no style/cap did poorly.  For the month, the leading sectors were Healthcare, up a whopping 9%, as our forward looking SectorCast had predicted, along with Industrials, up about 8.5%, followed by Financials and Energy, up about 8%.

I am not going to mention the nickname for the dominant issue of the day, since you are probably on the verge of screaming if you here it again (hint: initials are F.C.). But, unfortunately, we all remain hostage to the relentless political posturing of our elected officials during these critical budget negotiations. Not that we haven’t asked for it.

Last Monday was a banner day for most indices with S&P 500 hitting at new 46-month high of 1422.  Alas, a week later, today, it closed at 1382, down nearly -3%.  The NASDAQ and DJIA exhibited similar behavior.

This Could be THE Week

The S&P 500 really cut it close today.  Much like last Friday’s measly comeback for +0.1% gain for the week, it gained +0.22 points, up a whopping +0.016%.

Market Surges to 2-Month High--Why?

By David Brown, Chief Market Strategist, Sabrient Systems