E Market Briefing For Friday, Jan. 15

My point is when I hear chartists comparing this year with last year entirely do omit the backdrop of COVID-19. Though it lingers, the prospect of emergence may limit the downside of the next shakeout, to nothing like what we got last year.

Executive Summary:

  • The stock market continues relatively sanguine during not just my illness (not yet defined), but as suspected not heavily moved by political unrest.
  • The President, via an email to Fox News, called for an orderly transition to the new Administration, and requested no violence or vandalism.
  • Nevertheless the House moved forward with Impeachment, and with 10 Republicans voting 'yay', it passed, however no Senate action expected.
  • IF we can calmly get through the next week, the influence on the market may well wane, but we'll still be looking for a shakeout in the S&P (SPY).
  • Because the market (and corporations) are 'somewhat' adjusted to these pandemic business conditions, there is rotation from pricey super-caps to the infrastructure (or similarly under-priced sectors affirming a forecast of several months ago.
  • It take lots of 'heavy lifting' from the broad market to offset big-cap 'sag' if that really arrives, however so far that area is holding together, thus helps the S&P to 'hang-around' in the low 3800's around our maximum target or measure for this overall phase of technical action.
  • Ironically the increased demand for computers and cellphones has helped the backdrop even as growth outperforms value.
  • The Energy Sector continues acting well, but many of today's new upside call hopefully are correct, but the optimal entry was when Oil was in the mid-30's and everybody hated it (I called for 45 but higher if geopolitics, in this case Saudi production cuts) occurred, optimistically simply hold (OIL).
  • One other key forecast is starting to take form, that's a rebound in the US Dollar, while the 10-year also continues to firm a bit (UUP).
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