The stock market may have given a history-making example of how much it dislikes uncertainty this past week. By the time stocks opened on Wednesday, it seemed as though the Republicans had held on to the Senate, but lost control of the House of Representatives. That information was enough for some investors and traders, triggering Wednesday's rally.

The S&P futures opened almost 20 points higher, and the major averages also gapped higher on the open. The widely-watched Spyder Trust (SPY) closed Tuesday at $275.12. but opened Wednesday at $277.56. It finally closed the day at $281.01, up over 2% for the day. For the S&P 500, it was the ninth-largest gain ever.

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Most of the major averages closed the week well below the week's highs, but many still had solid gains, with the Dow Industrials up 2.84%, followed by a 2.13% gain in the S&P 500. The market internals were strong Wednesday, but by the close on Friday, the small cap Russell 2000 was only up 0.1% for the week.

The major averages, especially the tech-heavy Nasdaq 100, started to weaken on Thursday and then closed down 1.7% on Friday. It was only up just over 1% for the week. On Wednesday’s rally, healthcare, consumer discretionary, and technology led the way. The weekly analysis of the key sectors still is giving a mixed picture.

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The week's top performers, HealthCare Select (XLV), Reals Estate Sector (XLRE), Utilities Sector (XLU) and the Consumer Staples Sector (XLP) were all up over 3%, led by XLV. They all have positive weekly relative performance (RS) analysis, which is how I pick market-leading ETFs and stocks. It is based on a ratio of the ETF or stock price to the S&P 500. I look at it on a monthly, weekly, and daily basis. Those ETFs or stocks with the strongest RS analysis will generally outperform the S&P 500 when it is rising, and not fall as much when it is declining.

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The weekly chart of the Consumer Staples Select (XLP) is now approaching the January high at $57.76 (line a). An upside breakout is looking more likely, with initial targets in the $60-$62 area. XLP's weekly RS broke its downtrend (line b) a month ago, which completed the bottom formation. The RS is rising strongly, which indicates XLP can continue to lead the market higher.

It is clearly a split market, as the RS analysis is negative on all of the other sector ETFs except the Consumer Discretionary Select (XLY), which had a sharp correction in October but has had a nice rebound. The Technology Sector (XLK) also needs to have more positive action in order to signal that its decline is over.

Even though the November FOMC meeting is out of the way, there are still several key economic reports out this week. Several Fed governors and Fed Chair Jerome Powell are scheduled to speak on Tuesday and Wednesday.

Last week’s PPI report came in at 0.6%, higher than the expected 0.2%, so Wednesday’s CPI may get more attention. On Thursday, the Philadelphia Business Outlook Survey, Retail Sales, the Empire State Manufacturing Survey, and Business Inventories will all be released. On Friday there is the Industrial Production report.

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The Invesco QQQ Trust (QQQ) had a high Wednesday at $175.58, which was above the 50% resistance at $173.53, but below the 61.8% Fibonacci retracement resistance at $176.75. After Friday’s drop, the next support is last Monday’s low at $169.66, with further support at $167.50-$168. The Nasdaq 100 advance/decline line formed a short term bullish divergence (line b) at the late October lows. The A/D line has rallied above the mid-October high, but turned down from stronger resistance (line a).

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The advance/decline analysis is much stronger on the Spyder Trust (SPY). The weekly S&P A/D line has moved back above its WMA, after having dropped below it in October following a new high on September 21. The new high confirmed the market’s positive trend. The weekly Nasdaq A/D line (not shown) has rallied back to its WMA, but has not yet moved above it. The weekly OBV on the SPY rallied from support (line a), and moved back above its WMA which also is a positive sign.

The SPY had a high last week at $281.22 but was not able to close above the 20-week EMA at $276.48. There is next support in the $275-$276 area with stronger support at $270-$272. A daily close below $270 would be a clear sign of weakness.

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The SPDR Dow Industrials (DIA) held up the best last week, closing at $260.22, just below Wednesday’s high at $262.97. It is well above the 20-day EMA at $255.57, which is now rising. There is more important support in the $250-area. The daily Dow Industrials A/D line made a new all-time high last week, as it slightly surpassed the high from September 21, line a. The weekly A/D line is also well above its WMAs.

The Russell 2000 A/D line is still the weakest, as it has failed to overcome the October 16 high. Both of the daily NYSE A/D lines have moved above their WMAs, but also have not surpassed the October 16 high. The weekly A/D lines are still below their WMAs.

The plunge in crude oil prices has clearly been a drag on the stock market, as has the disappointing rebound in the Dow Transportation Average which has only retraced 50% of the decline from the September highs. A move above 11,000 in the Dow Transports and above the 50-day MA will be a sign that the Transports have resumed their major uptrend.

So what’s the strategy for the week ahead? The technical evidence still suggests that the stock market formed an important low in late October. The confirmation of the September highs by the major A/D lines is also positive for the intermediate trend. As I mentioned earlier, in “A Survivor’s Guide To Market Corrections”, that does not mean the stocks will quickly move to new highs. The extent of a further pullback this week will be important, but I think it will be a buying opportunity in the market-leading ETFs. I will continue to avoid the ETFs with negative RS analysis.