The Dow added 91 points, or 0.5%, to 17824 on Friday. The index’s gains for the week totaled 3.4%, the biggest weekly increase since early October.
Stocks climbed higher this week as investors shook off concerns stemming from the deadly terror attacks in Paris and Mali. Also improving investor sentiment were notes from last month’s Federal Reserve minutes, which helped clarify the path ahead for U.S. rates.
This week’s bounce followed the worst week for the S&P since August, brought on by a broad selloff in commodities that dragged down the broader markets, particularly energy companies.
The week before Thanksgiving and the week during, has been excellent for trading the last couple years and I expect that to continue. Next week we will see lighter volume, but stock movement is usually terrific.
It helps that the market seems to have finally grown up and accepted the realty of higher rates. The fed minutes were hawkish and the market took it very well. Is that an all clear for the market? Not sure, but I am bullish through Thanksgiving. Not so sure about December yet though. Stay tuned.
Biotech which tried to pop above a down channel that has been in place since August, went back and retested that breakout. You can see this in the chart below. My gut says this uptrend will continue as hedgies look for some alpha into year end. We are overweight biotech here based on this hunch. Many names in the group look spectacular.
We covered the last piece of our short oil trade and sold SCO for +10%.
Other trades that subscribers monetized last week (all held about a week) were:
MOS +5.0%, PACB ( partial sale) +29.0%. The portfolio continues to be led by CLDX, NFLX short BTU and others.
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