Major stock indices all closed the week in the negative territory ending eight weeks of winning streak as congress and senate republican unveiled details of their tax reform plans. Investors' hope for tax reform this year diminished as more details on were released with large gap between the plans making them difficult to reconcile between congress and senate republicans. For the week, S&P 500 index closed at 2582, down 0.21%, Dow Jones Industrial Average lost 0.40% while NASDAQ composite index decreased 0.20%.
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| Weekly chart of S&P 500 index |
S&P 500 index showed the first sign of consolidation after 8 weeks of winning streak. After reaching intra-week high near 2600, the index closed almost where it was at the beginning of the week. The pattern shows the indecision of the index at the top of the top end of it upward trading channel. It is likely that we may see it goes side way with downside bias in the next few weeks. This is consistent with our recent thesis that the index needs to digest its lofty gain if the rally is to continue.
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