SPX -- Weekly

Fundamentals
The SPX continues its recovery from a very deep oversold condition earlier in the year. The economy
and economic indicators have improved modestly from late 2015, and traders like perceived benefits
to US business from the weakening US dollar / stronger oil price combo underway. The longer run
outlook for the US trade position is improving, but the dollar went to a strong overbought and likely
belongs about 7% lower from current levels. Oil is in the midst of a healthy seasonal rally which
helps the outlook for the petro sector bottom line, although a sterner test of the rally may be ahead
come Apr. / May this year. The Fed is currently in retreat from the tight money talk of late 2015.

SPX net per share is a depressed $101. annual through the end of 2015, so the market is trading at
a lofty 20.3x latest 12 mo. net. Moreover, my proxy for business sales is up a scant 0.5% yr/yr
through Feb. and profit margin continues under pressure. With business remaining punk, SPX net
per share needs to do far better than currently to keep interest up.

Technical
With the SPX rally extending strongly into the current current month, the market is clearly over -
bought in the short term, but not so for the intermediate term. SPX Weekly

The weekly chart gives a mixed reading. The key indicators are in short run up trends and the
 SPX has moved up through the 13 and 40 wk. m/a's. However, the 40wk. m/a is still trending
down and the longer view of MACD and the 52 wk. ROC are still trending lower as well. Just
as the outlook for business sales and profits is not out of the woods yet, neither is the longer
run view of the market. But, at least there is some promise now as opposed to late last year
when 'It ain't over 'til its over' had to suffice.