SPX -- Weekly

Fundamentals
The weekly leading economic indicators have been suggesting a decent rebound in output this
spring, but the degree of positive response in the broad economy has been only slight so far.
Inventories are coming under control, but remain high. As well, the household survey of civilian
employment has flattened out in recent months despite an improvement in total business new order flow.
Plainly, as 2015 wore on, business geared up for stronger economic performance, and progress
has been very slow instead. Consumers have been lacking in inspiration and more company owners
and managers are uncomfortable in a sluggish global environment. Productivity has suffered as
companies are geared now for higher levels of business. The US plainly needs to pick up the pace
soon before a more lingering malaise develops.

Valuation
SPX return on equity at market (earnings yield) is running around 4.7% and the dividend yield is
about 2.2%. Thus, the SPX remains at a premium to cash equivalent and the 10 yr. Treasury, but
this is thin gruel especially since operating earnings remain under pressure and the p/e ratio on
last 12 months net per share is 21x. Investor patience, remarkably, has not yet worn that thin.

Technical
The market remains in an uptrend but has dropped into consolidation mode following the terrific
Feb. Apr. upside run. Short term support has now risen to SPX 2040. The market still correlates
well with the direction of the oil price this year, although now less so than earlier. Equities players
need to pay heed to the fact that June is a period of seasonal weakness for the price of oil (See
the WTI crude chart in bottom panel).

Once again, the SPX sits at the 2100 resistance level.  SPX Weekly