Stock Market Summary
Monday, June 13, 2016
- The major market indices finished mixed last week. Some of the indices broke their streak of three consecutive weeks higher as stocks became slightly extended and susceptible to a pullback.
- Last week, the market as measured by the S&P 500 exceeded the recent April high and the more important November high. This leaves the all-time high just barely 2% away from Friday’s closing level.
- A key component to any sustainable market rally is the participation of the small capitalization stocks and the semiconductors. Recent strength in both has generated some durability to the current rally. The Russell 2000 Index which represents the small capitalization universe gained nearly 10% from the May low to Wednesday’s high. The semiconductors represented by the Philadelphia Semiconductor Sector Index gained nearly 14% during the same time frame.
- The selling that took place late last week was needed. The stock market consolidated some of the recent gains providing a much healthier environment for further gains in the coming weeks.
- The S&P 500 has managed to extend its streak to 9 weeks without losing 1% or more on any trading day. Quite a difference from the beginning of the year when it recorded 14 days of 1% or more daily declines in the first 9 weeks of the year.
- Solid support for the stock market as measured by the S&P 500 is between 2080 – 2075. Resistance lies at 2100 – 2120. The all-time high of 2134.71 occurred in May of last year. The S&P 500 closed near 2096 on Friday.
- The short, intermediate and long term trends are all higher.
Sources: bankrate.com, bloomberg.com, briefing.com, Dow Jones News, Financial Times, finviz.com, Investor's Business Daily, marketwatch.com, seekingalpha.com, Thomson Reuters/First Call, U.S. Dept of Treasury, yahoo.com and individual company web sites and press releases.
Leonetti & Associates, LLC views or opinions are as of a certain date and subject to change without notice. The material contained herein is for informational purposes only and obtained from sources we consider reliable. We make no guarantee as to its accuracy or completeness. References to specific securities and industries/sectors should not be considered recommendations to buy or sell any security or advisory service. Past performance is not a guarantee of future results.