Just when you think the market has run out of catalysts to push stocks to new highs, they break out and rally.  With earnings season in the rearview mirror and President Trump coming back from an overseas trip, the possible positive catalysts for equities were hard to come by.  In the market, though, has there ever been a rally based on a positive catalyst that everyone was expecting?  Of course not.  If that was the case, it would have already been priced in!

While the S&P 500 actually took out its bull market highs on an intraday basis in early May, it didn’t make a convincing breakout to new highs until this week, when the index cleared its two-plus month period of consolidation.  As shown in the chart below, the stair step pattern we have been highlighting endlessly for months now remains intact, although, at this point, the most recent run still looks like a baby step compared to prior legs higher.  Will it continue?  Only time will tell, but in this week’s report, we provide updates to both the pros and cons for further gains down the road.

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Have a great weekend!