December 30, 2011



December 2, 2016

 

Dear Investors,

Over the last few weeks, I have been writing about the November 29th projected market turning point. Technical wave mapping was suggesting that the Dow Jones Industrial Average would peak around 19,200 and the S&P 500 Index would peak at about 2,225. The S&P 500 Index reached a closing high of 2,213.36 last Friday, November 25th, and an intraday high of 2,214.10 on November 30th, before finishing the day below 2,200 as the trading volume increased by 50%. The Dow Jones Industrials reached an intraday high of 19,225.29 on November 30th and closed more than 100 points lower as the trading volume doubled at the New York Stock Exchange. The Dow Industrials reached a closing high on December 1st of 19,198.81. Like the S&P 500, the NASDAQ Composite and Russell 2000 also hit their closing highs last Friday. The Composite reached an intraday high on November 29th and the Russell’s intraday high was its closing high a week ago. Generally significant market turning points occur when all or most of the major market indices peak at the same time. Therefore, it looks as though the large degree wave (e) up rally that could complete the large rising bearish wedge that began last February occurred this week.

The Dow Jones Industrial Average was the only major index to finish the week on the positive side. The Blue Chip index added 18.28 points, or 0.1%, this week to close at 19,170.42, and is up 10% this year. The S&P 500 Index slipped 21.40 points, or -1.0%, this week to close at 2,191.95, and is up 7.2% this year. The NASDAQ Composite plunged 143.27 points, or -2.7%, this week to close at 5,255.65, and is up 5.0% in 2016. The Russell 2000 lost all of last week’s gains plunging 32.95 points, or -2.5%, to finish the week at 1,314.25, and is up 15.6% this year.

There is a possibility that there could be one more surge higher when all of the markets peak on the same day to see the S&P 500 Index reach the projected 2,225 mark. If this is the end of wave (e) up and the rising bearish wedge, then the markets could be beginning a multi-week and/or a multi-month decline consisting of several larger and smaller degree waves up and down. There was a third Hindenburg Omen generated by the markets this week suggesting that there is an increasing probability of a greater than 20% market decline in the coming weeks.

It was a busy week for economic data, but the markets were not really reacting to the various data points. On Tuesday, the second estimate of the third quarter GDP came in at 3.2% growth, which was slightly higher than the 3% economists were expecting. October personal income was higher than expected, but personal spending was much lower than expected, although it was still positive. October pending home sales were lower than expected. The November Jobs Report showed that 178,000 jobs were added last month and that the unemployment rate dropped to 4.6%. The employment data is just a consistently inaccurate survey. The labor participation rate dropped to 62.7, one of the lowest recorded numbers in history. The October Jobs Report was revised down from 161,000 to 142,000. The unemployment rate dropped because another 380,000 Americans left the workforce. Yet the main stream media is touting the strong economy that President-elect Trump will be inheriting. The bottom line is that if this data were true, then the economy should be growing at an annual rate of 3% or more.

If you would like to discuss your portfolio and the potential effect of the election on your portfolio, then please do not hesitate to call. Now would be a great time to discuss your financial plan, risk analysis, year-end tax plan and/or the new NJ tax changes, so please call our office or email info@. It is time to put our B.E.L.I.E.V.E. Wealth Management process to work for you.

Regards,

Vincent Pallitto, CPA, CFP®   

Certified College Planning Specialist

Summit Asset Management, Inc.



973-301-2360

973-301-2370 Fax

A branch office of, and securities offered through LPL Financial

Member FINRA SIPC

 

You cannot invest directly in a market index, market indices are for benchmark purposes.  The information in this market commentary is obtained from various news sources, and . 

Fibonacci Phi Date (also known as Fibonacci Time Extensions) is a technical indicator used to seek to identify the timing of significant price movement in the market, and is based on the Fibonacci Number Sequence.

The Hindenburg Omen is a combination of technical factors that attempt to measure the health of the NYSE, and by extension, the stock market as a whole.  The goal of the indicator is to signal increased probability of a stock market crash.

The McClellan oscillator is a market breadth indicator used in technical analysis by financial analysts of the New York Stock Exchange to evaluate the balance between the advancing and declining stocks.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investment(s) may be appropriate for you consult your financial advisor prior to investing.

The economic forecasts set forth in the presentation may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results.

The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market.

The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index.

The Blue Chip Index is a stock index that tracks the shares of the top-performing publicly traded companies.  These indices are unmanaged, which cannot be invested into directly.

Past performance is no guarantee of future result.

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