There is not much to say about last week except the Goldilocks employment number on Friday, which Trumped and thumped all bearishness and the market bears.   The Trump Tariffs were watered down, and trade diversion to Mexico and Canada will render them ineffectual as far as expanding steel capacity and employment on a structural basis in our opinion.   Gary Cohn’s resignation except for a quick dip lower was a nonburger.

The big focus next week will be politics, the special election in Pennsylvania’s 18th congressional district.  President Trump is campaigning there as we write.

The Nasdaq made a new high on Friday, and the S&P500 has recovered 75 percent of its losses and now only 3 percent off its high.  The recovery has been relatively narrow.  The Dow and NYSE Composite have recovered just about half of their losses.

The key to stocks now is to see how interest rates behave.  Do they stay below 3 percent or begin to creep higher?   We think the later as the technical position is not positive.  Lot’s of supply and Fed and other central bank demand has gone away.   The decline in demand may be partially offset as interest rates in Euro land remain well behaved.

Next week is make or break (or delay) for the JFK-Trump analog.  The Trump S&P500 is a little over 2 percent higher than the JFK S&P500 on Day 335 after election day.  Note the JFK market rolled over on Day 338.   So sometime in the next week or two,  the S&P500 should rollover again for it to stay true to the analog.  The catalyst for that will probably have to be the 10-year yield blasting through the 3 percent.