SPX Weekly -- God Rest Ye Merry Gentlemen

We may well need that rest for 2017. Even the bulls are concerned that the Jan.- Feb. period may
bring some corrective action as Trump rolls out his programs and tweets it all out with an official
imprimatur. And, the Fed will be around, too. The kindling has already been tossed into several
dumpsters as well. There is a nuclear arms one, and several for China, including the one China
policy, and the prospect of tariffs. Immigration policy will get a few, especially since California
is sending ominous signals of resistance, and there will be a chorus of loudmouths in the cabinet
and advisors like Carl Icahn to set off a couple of dumpster blazes. With the Donald, conflicts
of interest will be the norm, and the issue of high crimes and misdemeanors may eventually
arise if the GOP happens to reach a point where its fortunes, now seen as good, are threatened.
Pence will be viewed  as fine in a severe pinch.

Fundamentals
Weekly cyclical fundamental indicators continue to trend up, and the economy finally showed
signs of stronger growth in Q3. Hardly all is well yet. On a monthly basis, my proxies for total
business sales are doing a little better but expansion is still a bleak +1-2% yr/yr. Corporate
profits, helped by higher fuel prices for oil and gas producers, are recovering. The weekly
indicators, which the market has followed carefully since Feb., promise more growth as well as
inflation to come. Absent argument about valuation, these are positives.

Technical
The post-election rally has proceeded damage-free and has only been encumbered by recent
consolidation. The Dow 20K baseball hats sit at the ready in a NYSE storeroom. The up leg in
the market since Feb. is extended relative to its trend line and is moderately overbought at 6%
above the 40 wk. m/a. RSI and MACD are directionally positive but are approaching overbought
territory. Continued consolidation in the SPX or worse next week would fracture the post-
election trend up and raise eyebrows.  SPX Weekly