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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 were dragged down by oil on Friday, but the S&P 500 still posted another weekly gain, ending the week up 1.6%.
This week data will be released on pending home sales, manufacturing, construction spending, the service sector, the Fed’s Beige Book and the jobs report.
Speaking last Thursday, San Francisco Fed President John Williams said that the economy is in good shape despite market uncertainty: “When I look at U.S. data, when I look at employment, GDP, inflation, wages, none of those are showing signs of things that are consistent with what we are seeing in the markets”.
The economy grew 1% in the fourth quarter, according to the latest GDP estimate, with growth revised up on a larger stockpile of inventories. For 2015, the economy grew 2.4% for the second year in a row.
The Atlanta Fed’s GDPNow model is forecasting growth of 2.1% for the first quarter, down from a previous 2.5%, due to a downward revision to inventory investment in the BEA’s GDP report.
Consumer spending gained .5% in January, as consumers stepped up purchases on a range of goods. At the same time, there were hints of price pressure: inflation, excluding food and energy, rose .3% – the biggest increase since January 2012.
Sales of existing homes edged up .4% in January to an annual pace of 5.47 million – marking the highest level since last July, and the second-highest since 2007. According to the National Association of Realtors, “The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints. Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession”.
At the same time, sales of new homes fell 9.2% in January to an annual rate of 494,000. The inventory of new homes for sale increased to 238,000 – the highest since October 2009, and a 5.8 months supply.