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Market Update

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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:

  1. Relative Strength Index (RSI)-Negative

  2. Chaikin Money Flow (CMF)-Positive

  3. MACD- Negative

  4. Money Flow Index-MFI-Negative

More on the Market and the Economy:

Stocks posted their first weekly gain of the year on Friday, driven by rising oil prices. The S&P 500 logged a 1.4% gain for the week.

Source: dshort.com

This week data will be released on new home sales, pending home sales, durable goods, GDP and the FOMC meeting announcement.

The Conference Board’s Leading Economic Index slipped .2% in December: “The U.S. LEI fell slightly in December, led by a drop in housing permits and weak new orders in manufacturing. However, the index continues to suggest moderate growth in the near-term despite the economy losing some momentum at the end of 2015. While the LEI’s growth rate has been on the decline, it’s too early to interpret this as a substantial rise in the risk of recession”.

The Atlanta Fed’s GDPNow model is estimating growth of .7% in the fourth quarter, up from .6%, following data on consumer prices and housing starts.

Inflation slipped in December on lower food and gas prices – food prices slipped .2% and energy prices fell 2.4%. For 2015, inflation rose .7% – the second slowest rate in 50 years.

Sales of existing homes jumped 14.7% in December, marking the biggest monthly increase on record, and bringing total sales for 2015 to 5.26 million. According to the National Association of Realtors, “While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015. Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”

Homebuilders slowed construction in December, with housing starts falling 2.5% to an annual rate of 1.15 million. At the same time, permits for new construction slipped 3.9% to an annual 1.23 million. On the upside, in 2015 both permits and housing starts saw their best year since the recession.

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