The market finally took a good punch in the form of a -1.09% sell-off in the S&P 500 Index yesterday, but like a resilient prize-fighter it immediately punched back. The indexes gapped up sharply this morning after President Trump’s State of the Union speech and a strong ADP jobs number that showed 234,000 new jobs vs. expectations of 190,000.
As expected, the Fed held off on raising rates today, but indicated that they would likely raise rates at their next meeting. This sent the market into an initial rally, after which it steadily deteriorated until we had a full-blown reversal off the extreme morning highs. But the reversal didn’t hold and the market jacked to the upside by the close.
As I’ve discussed recently, the optics of even a small pullback in the market, say of 2-3%, is not going to look pretty given that 1% is the equivalent of 260 Dow points. That also means that a 300-400 point Dow decline could just be the start of a deeper and perhaps necessary correction.
The rest of this report is available for Gilmo Report Members only.The full report will be available 45 days after it is posted. For immediate access: login
Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2017 Gil Morales & Company, LLC. All rights reserved.