"Stock market hits new high with the longest winning streak in Decades." "great level of confidence and optimism - even before tax plan rollout." Trump tweet. All the Pros know that even though the Dow is at All-Time Highs, it needs Confirmation. The Dow Transports hitting new highs does that. Strength in the Air lines, the Rail Roads and Trucking presage higher Index prices. Heck, even Warren Buffet bought into Airlines.
More important than those technicals is the price move in Copper. It is making new highs. The Dow is making All Time Highs. When they move together it is very powerful. Dismiss this at one's own peril. The Analyst community is focused upon Supply. It is the Demand that is the story. It is confirmation that the US is finally accelerating its Growth. Just as important, is what is says about China.They threw the kitchen sink at the Economy. It has finally woken up it seems.
Meeting with an illustrious Industry veteran yesterday, he remarked upon our re-iteration of 1994. The FED raised and the market went for a 6-month loop. They raised again and the market sold off hard for about a month. In both cases, the markets retraced their footsteps to where they had been prior to the Raises. The FED raised a third time and markets took off. It was the start of the run all the way to 2000. Markets exploded because they finally realised that the FED was tightening because the economy was GROWing again. This would be akin to the Cavalry coming over the Hill for Yellen.
The European Parliament voted 408 to 254 to confirm a Trade deal with Canada. The Comprehensive Economic and Trade Agreement (CETA) will come into force immediately. Member states will have to work and vote on some of the items. Trudeau will take credit. Thanks, Stephen Harper.
US Consumer Spending is up. US Inflation is up at a 5 year high. US Manufacturing production is up. US retail sales beat. Yellen said it "would be unwise" to delay raising rates too long. She's going to get ahead of the Curve? The Markets are ready to get on Board.
Invest the Money.
Edward Pennock CFA, Founding Partner
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