Market Light Weekly Update June 27th, 2017: We Hold These Truths to be Self Evident…

John Dupriest Market Light

What wonderful, inspiring and reassuring words: WE hold these truths to be self-evident, that all people are created equal; that they are endowed by their Creator with certain inalienable rights…


Those words and the ones that follow them were copied laboriously onto a piece of lambskin 241 years ago and have become the bedrock of our culture and our country. As we approach the 4th of July – Independence Day – reflect for a minute (or an hour) on who we are and how we became “us.” It is important and we have much to be thankful for.


One of the things we can be thankful for is the relentless bull market that is now in its 100th  month. That’s way long. It’s endurance is largely from a resounding bounce off the bottom in March 2009, interest rates so low that equities were about the only game in town, and the strength and safety of the US as a haven against turmoil in much of the world. (It doesn’t hurt, either, that corporate earnings have been respectable for the most part.) We’re strong and we’re proud.


To stay strong (and to change metaphors for a minute) you have to have good health. And there is nothing more in the news lately than proposed changes to healthcare funding. Whatever side you take politically, you have to marvel at the complexities of addressing problems so enormous (about $0.17 of every dollar spent in the US is on healthcare) and the dilemma of having treatments/medicines/technologies that are essentially pretty effective but often unaffordable on both the national and individual scale. It’s a toughy.


From an investors’ perspective, healthcare is on a roll. Here are the past week’s strong relative strength performers: BioTech (FBT), NASDAQ Biotechnology IBB), Healthcare (IYH), Pharmaceuticals (IHE) and global Healthcare (IXJ). On the weak side (once again) are Oil & Gas Services (XES), Oil (DBO), Natural Gas (FCG), Silver (SLV), and the Commodity Tracking Index (DBC).


Also, the Markets overall have seen some weakness; not great, but detectable. We are moving the Light from Green to Orange: Cautious and Deteriorating (but only a bit so far).


The Technical Tea Leaves are mostly silent on the matter this week: “The new high/new low indicator has reversed to the downside.  This is a reliable bearish signal that  is often followed by an downward price movement. In this sideways market a downtrend could start  shortly.”