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)-Negative
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Last Tuesday the S&P 500 reclaimed firmer technical ground when it broke above its 200-day moving average (the recent drop below the 200 DMA was the first since November 2011). The index went on to post a 4.1% weekly gain – its best week since January 2013 – bringing it 2.33% from its record close on September 18th.
So far, of the S&P 500 companies that have reported earnings, close to 80% have beaten profit projections, and 61% have topped revenue estimates.
The Nasdaq regained its 50-day moving average on Friday, closing almost 4 points above the technical level. With that, the index tackled a move above both its 200 DMA and its 50 DMA in the space of about a week. For the week, the index posted a gain of 5.3%.
This week will see the release of data on pending home sales, durable goods, GDP and news from the Fed’s FOMC meeting.
After increasing 1.1% in July, and remaining unchanged in August, the Conference Board’s Leading Economic Index rose .8% for September. According to the report: “the outlook for improving employment and further income growth are expected to support the moderate expansion in the US economy for the remainder of the year”. With regard to market volatility, Conference Board economist Ken Goldstein noted that “the financial markets are reflecting turmoil and unease, but the data on the leading indicators continues to suggest moderate growth in the short term. Meanwhile, the weak advances in the housing market remain a bigger risk to the outlook than short-term financial gyrations”.