The post-election market rally, which has been coined by many as the “Trump Trade”, continued last week leading to additional gains in all of the major market indices. Even after what looked to be a Friday fade in the market, the last 8 days have led to an overall pronounced move in the market, especially in the Dow Jones Industrial Average and the Russell 2000 — both of which have now firmly moved into overbought territory. The S&P 500 too, while not overbought, is within striking distance of its 52-week high, which as we enter this holiday-shortened week means that index is trading at nearly 18.5x expected 2016 earnings.

Viewed in tandem, we are likely facing odds better than 50/50 of the market giving back some ground after such a quick move higher. Factor in the Thanksgiving holiday and lighter that usual trading volume and those odds shift even further in favor of at least some retrenchment.

If the official start of the 2016 holiday shopping season underwhelms, the odds tick even higher.

• October Retail Sales Report — A Continued Shift Towards Digital
  The headline figure for retail sales and retail sales ex-auto figures from the October Retail Sales Report came in better than expected. Digging into that report as we like to do, we discover where consumers were really spending during October . . . Read More >>
• Fed Chairwoman Janet Yellen’s Testimony Before Congress — Once Again, Clear as Mud
  We’ve gathered our Dick Tracy decoder ring, 007’s infamous watch, an I-Spy beeper and even trotted out a Magic 8-ball to help see through that verbal mud the Fed Chair dropped in Congress last week. In doing so, we once again find that context and perspective shed some light on what was really being said. Read More >>
• What to Expect During this Holiday-Shortened Trading Week
  Given the lightly staffed trading floors and rather low trading volume, Wednesday and the Friday after Thanksgiving are days that companies use to slip in not so good news. Their bet is people will be traveling and or shopping, and the news flies under the radar. . . not so fast. Read More >>

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Monday Morning Kickoff 11-21-2016