SuttonWatch.Net: 2017 Results - And A Look Ahead To The New Year In 2018

Monday, January 1, 2018

2017 Results - And A Look Ahead To The New Year In 2018

2017 results:

Dow Jones Industrial Average 24,719 +25.1%

Dow Jones Transportation Average 10,673 +18.0%

S&P 500 Index 2,674 +19.4%

Russell 2000 Index 1,536 +13.2%

New York Composite Index 12,808 +15.8%

Nasdaq Composite Index 6,903 +28.2%

FAANG Stocks (Composite) +46.7%

If dividends are included, the U.S. stock market managed to advance every single month in 2017, an unprecedented achievement. And the S&P 500 Index is now up 14 months in a row!

The Dow Jones Industrial Average posted 71 record highs in 2017! Valuations are at or near record highs; volatility (as measured by the VIX Index) is near record lows; margin debt is at a record high; retail customer account cash reserves are at a record low, and bullish market sentiment among often-wrong investor groups is at or near record highs.

Wow! What's not to like here?

I think it may be noteworthy that almost every major benchmark U.S. stock market index posted a modest loss last week despite the fact that seasonal factors mostly favor an up week for this holiday-shortened 4-day session historically.

Friday's "significant" losses (on the last trading day of 2017) were especially noteworthy given the fact that daily chart sell signals were triggered in most major indexes by my computer trading system (see charts below).

Bottom line: A major correction in the U.S. stock market may have already begun with last week's minor losses. All the best possible news (involving corporate tax cuts and positive corporate earnings) is already discounted in U.S. stock prices, but key potential negative risk factors (like ongoing Fed tightening and the ongoing remarkable "shift" to the left politically in the U.S.) have generally been ignored by investors (to their ultimate peril).

P.S. Best Wishes and Happy New Year!