Overview
With S&P 500 (SPY) closing 1 percent below its all-time highs, it has been a rather good week for the U.S. stock market. Despite the initial downturn and shaky performance on Monday, the index managed to squeeze a 0.8 percent weekly gain, mainly due to the upturns that followed on Tuesday and Thursday.
Following the post-elections spike, performance of the Dow Jones Industrial Average (DIA) is beginning to weaken. Despite the strong price action in McDonald's (MCD) and Goldman Sachs' (GS), sluggish post-earnings dynamics in the shares of 3M (MMM), IBM (IBM), Boeing (BA), Home Depot (HD), Johnson & Johnson (JNJ), United Technologies (UTX) and Caterpillar (CAT) have been weighing on the index.
Indicative of risk-on sentiment was the continued uptrend in Russell 2000 (IWM), which was accompanied by a significant build-up in net-long speculator positions. While the speculators' positioning in Dow Jones 30 futures experienced a divergence between…