Major indexes rallied Friday on news the House had passed a tax reform bill

After heading downward during the week, major indexes rallied Friday on news the House had passed a tax reform bill.  U.S. tax burdens – on both corporations and individuals – remain such a big concern of institutional investors that any time it appears some meaningful relief is possible they respond with optimism by buying stocks.  Of course, it falls to the Senate to follow-through, which remains uncertain, so Friday’s optimism may prove only momentary.

A mix of movements among our stocks – some longs sagging on selling, others remaining resilient and even posting impressive new weekly highs.  Same with shorts – some continuing downward for new weekly lows but others getting upswept in Friday’s rally.  Not many moving enough to signal a trade, however, and not as many new weekly highs/lows as many remain range-bound.

As predictions about 2018 begin to appear in the media, there is no consensus on which way the broad market will trend.  In fact, two articles appeared just this past week, with one warning “Wall Street bulls warn a major pullback is near” followed by “Goldman Sachs expects 2018 market to deliver more upside surprise, even better than 2017”.   Clearly someone will be right, and someone wrong.  Either way, our strategy of stock-specific analysis will remain highly relevant in 2018 as it has these past years.

Highlights:  4 new weekly highs in long positions.  7 stocks with double-digit long gains:

     FIVN +17%      CECO +27%                                                         BZH +62%                                                                   

     HUN +19%      URBN +29%                                                        LPSN +60%

     NCI +16%                                                        

     

3 new weekly lows among short positions.  4 stocks with double-digit short gains:

                              EVTC +22%      CECE +35%

                              TRUE +27%      EVH +32%

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