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Market Direction Is Important –
Updated Chart of the S&P 500 and Secondary Signals
Of our Four secondary indicators under our MTI:
Relative Strength Index (RSI)-Positive
Chaikin Money Flow (CMF)-Positive
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Stocks extended their gains on Friday, with the S&P 500 posting a .9% gain for the week, marking its sixth consecutive weekly gain.
This week data will be released on new home sales, durable goods, pending home sales and GDP.
Builder confidence edged higher in October, with the NAHB index rising to 68, the highest reading since May. According to the NAHB, “it is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer. With a tight inventory of existing homes and promising growth in household formation, we can expect the new home market continue to strengthen at a modest rate in the months ahead.”
The Conference Board’s leading economic index slipped .2% in September, marking its first decline in a year. According to the Conference Board, “the US LEI declined slightly in September for the first time in the last twelve months, partly a result of the temporary impact of the recent hurricanes. The source of weakness was concentrated in labor markets and residential construction, while the majority of the LEI components continued to contribute positively. Despite September’s decline, the trend in the US LEI remains consistent with continuing solid growth in the US economy for the second half of the year”.
After three months of decline, existing home sales picked up in September, rising .7% to an annual rate of 5.390 million. According to the National Association of Realtors, “Realtors this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings – especially at the lower end of the market – and fast-rising prices that are straining the budgets of prospective buyers…sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida – hit by Hurricanes Harvey and Irma – saw temporary, but notable declines”.
Housing starts fell 4.7% in September to an annual rate of 1.13 million as builders broke ground on fewer homes. At the same time, permits for future building fell 4.5%.
The Atlanta Fed’s GDPNow forecast for third quarter growth held at 2.7% following last week’s residential construction data.