Market at a Glance - 10/27/2016
By: Christopher Mistal
October 27, 2016
10/26/2016: Dow 18199.33 | S&P 2139.43 | NASDAQ 5250.27 | Russell 2K 1204.75 | NYSE 10528.19 | Value Line Arith 4836.99
Psychological: Neutral. According to the most recent Investor’s Intelligence Advisor Sentiment survey sentiment is in neither excessively bullish nor excessively bearish. Bullish advisors stood at 47.1%, Bearish advisors were at 23.1%, while correction advisors are at 29.8%. Sentiment does not appear to be at either extreme which suggests there is room for the market to move higher. Weekly CBOE Put/Call ratio was 0.59 last week, another middling level that can support a move higher.
Fundamental: Mixed. Tomorrow we will get an advance estimate for Q3 GDP. According to the Atlanta Fed’s GDPNow model we will likely see a number around 2.1%. Not bad, but not great. Existing home sales, the largest portion of the housing market, appear to be plateauing. New home sales also appear to be settling into a sideways pattern. The labor market is exhibiting a similar pattern, weekly initial claims remain low and the unemployment rate is hanging out right around 5%. 
Technical: Range Bound. Since breaking out in July and topping out in August, DJIA, S&P 500 and NASDAQ have essentially gone nowhere. DJIA and S&P 500 have been fighting to reclaim their respective 50-day moving averages since early September. NASDAQ’s chart is firmer by a slim margin. However, all appear stuck between their respective June highs and all-time highs. This resiliency suggests the market is waiting to see what happens on Election Day before making its next move.
Monetary: 0.25-0.50%. No one seems to expect much from the Fed’s November meeting next week just ahead of Election Day. A rate hike at the December meeting is increasingly possible, maybe, perhaps, feasible, if economic data is as good as expected or better. At this point, even if the Fed said “we are going raise rates in December” at the November meeting, we’d still be left wondering if they would actually follow through in December.
Seasonal: Bullish. November begins the “Best Six Months” for the DJIA and S&P 500, and the “Best Eight Months” for NASDAQ. November also marks the beginning of the best consecutive three-month span November-January. Election-year Novembers mixed though, # 1 DJIA & #2 S&P 500, but NASDAQ, Russell 1000 and Russell 2000 rank #8, #6 and #8 respectively. Sizable losses in 2000 and 2008 damage average performance and rankings.