Yesterday saw some broad based selling that cut across all sectors. Volume is light on this last week of the year, which amplifies the effects of institutional trades and news. For the most part, the stocks that have run up the most are seeing some profit taking. It is all orderly so far. Yesterday, the Dow had its second triple-digit sell-decline since Trump’s election.  Chatter about Dow 20k persists (although hopes are dwindling that it will happen this year), and while it is a psychologically important milestone, it is worth remembering that is all it is. Pullbacks and sideways action are a healthy consolidation for the market.

A subscriber asked if he should sell now to avoid a possible market correction in early 2017. I think trying to game short term dips that are not related to fundamentals is just a game not worth playing. Ideally, you would be buying short term dips. However, if you are uncomfortable holding and are okay with paying capital gains tax to avoid an unpleasant dip, then by all means, bail out. Keep in mind that last year saw the worst start in market history. Imagine if you sold ahead of that, or in its midst, and missed the rally that followed.

On a near term basis, there is support at 19,750 then 19,500 for the Dow, which is the most extended of the major indexes. The NASDAQ Composite is at a base of support that has built over the past two weeks at 5430. The next support levels are 5400 then the 50-day moving average at 5348. The S&P 500 is a similar picture to the NASDAQ, with the index at a recent support level at 2250, the 50-day moving average is nearby at 2209.

In keeping with his promise to bring jobs to America, President Elect Trump announced yesterday that Sprint will bring back 5,000 jobs and One Web will create 3,000 jobs.  The Sprint deal was part of SoftBank’s commitment to Trump to invest $50 billion in the U.S. to create 50,000 jobs.  According to a Sprint spokesman, "The 5,000 jobs announced today are part of the 50,000 jobs that Masa Son (Masayoshi Son, founder and CEO of SoftBank) announced a few weeks ago, but these jobs will be funded by Sprint."  Softbank owns 80% of Sprint and recently invested $1 billion in OneWeb.  

Speaking of jobs, initial claims out this morning showed a decrease of 10,000 to 265,000 from last week’s unrevised number.  The 4-week moving average decreased 750 to 263,000. This is now 95 consecutive weeks with claims below 300,000. 

Seasonally adjusted insured unemployment was 2,102,000, an increase of 63,000 from the previous week's revised level of 2,039,000. The 4-week moving average was 2,042,250, an increase of 4,500 from the previous week's revised average of 2,037,750.

Also, on the economic front was the November International Trade in Goods, which decreased by $65.3 billion, the largest deficit since March 2015.  October was revised down to $61.9 billion from $62 billion. The news sent the greenback a bit lower and the 10-year U.S. Treasury yield down to 2.48%, the lowest level since before the Fed rate hike announcement.