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This Week on Wall Street - Week of May 15th

Our model readings are holding steady from last week after showing some exhaustion signals. We remain in this tight trading range as the theme in the overall market remains the same; large caps over small caps and value over growth.

Market Commentary

Our model readings are holding steady from last week after showing some exhaustion signals. We remain in this tight trading range as the theme in the overall market remains the same; large caps over small caps and value over growth.

This week has a slew of Fed speak which could inject volatility into markets. Fed Presidents will discuss their thoughts on the central bank's inflation fight and recent banking stress. Notably, we get another read on the consumer on Tuesday with Retail Sales. The expectation is for a slight gain after last month saw an unexpected fall.

Among sectors, we are seeing strength out of a few sectors like Technology, Communications, Consumer Cyclical, Consumer Defensive, and Utilities while Energy, Financials, Industrials, and Health Care are at the bottom of the pile. Picking names with relative strength within sectors has remained the dominant and most effective strategy.

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What is Newton?

r Newton model attempts to determine the highest probability of future price direction by using advanced algorithmic and high-order mathematical techniques on the current market environment to identify trends in underlying security prices. The Newton model scores securities over multiple time periods on a scale of 0-20 with 0 being the worst and 20 being the best possible score. Trend & level both matter.

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Economic Releases This Week

Monday: Empire State Manufacturing Survey, New York Fed President Williams Speaks, Minneapolis Fed President Kashkari Speaks

Tuesday: Cleveland Fed President Mester Speaks, US Retail Sales, Home Builder Confidence, Fed Vice Chair Barr Testifies, Richmon Fed President Barkin Speaks, New York Fed President Williams Speaks

Wednesday: Housing Starts, Building Permits

Thursday: Philadelphia Fed Factory Survey, Initial & Continuing Jobless Claims, US Leading Economic Indicators, Existing Homes Sales

Friday: New York Fed President Williams Speaks, Fed Chairman Powell and former Fed Chairman Bernanke on Panel

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Technical trading models are mathematically driven based upon historical data and trends of domestic and foreign market trading activity, including various industry and sector trading statistics within such markets. Technical trading models, through mathematical algorithms, attempt to identify when markets are likely to increase or decrease and identify appropriate entry and exit points. The primary risk of technical trading models is that historical trends and past performance cannot predict future trends and there is no assurance that the mathematical algorithms employed are designed properly, updated with new data, and can accurately predict future market, industry and sector performance.