This piece is a year in review of the financial markets using primarily charts. Most year in reviews are the equivalent to a thesis paper in college that takes hours to read through so I will stick to the charts with a bit of commentary. The charts you will review are long-term charts that show the price action from the last 15 years so you can see how each sector has performed relative to the financial crisis.
In many cases you will find that we have exceeded the 2007 top that preceded the crisis (but in not all cases). I will use some technical analysis that show a relationship still exists from the 2007 high to the 2009 low thorough Fibonacci relationships. The most interesting fibonacci relationship is the “161.8% relationship where I extend the 2007/2009 price relationship to current price levels.
The charts below will begin with the major indices (S&P 500, DOW, NASDAQ, Russell 2000) and their respective sub sectors such as industrials, financials, materials, utilities, etc. I have also included a few charts on currencies given what happened around the BREXIT.
2016 had three main events: 1) a low reached in January from the Fed raising interest rates in December 2015 2) BREXIT and the crash of the EURO and the British Pound 3) The U.S. Presidential election and the subsequent rally into the end of 2016. Next year we will focus on rising interest rates, inflation, policy changes to corporate taxes, healthcare and the rate of change to corporate profits and GDP growth.
The charts below use MONTHLY candles – so each candle represent one month’s price action. A candle can represent, a month, week, day, hour, etc. These charts are long term, so I am using the monthly candles.