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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)-Negative
Chaikin Money Flow (CMF)-Negative
Money Flow Index-MFI-Positive
More on the Market and the Economy:
Stocks sank on Friday, one day after the Fed’s warning about the global economic outlook. The S&P 500 slipped 1.6%, erasing gains for the week and posting a modest weekly loss of .15%.
This week data will be released on existing home sales, new home sales, durable goods and GDP.
The Conference Board’s Leading Economic Indicators edged up in August of remaining unchanged in July: “The U.S. LEI suggests economic growth will remain moderate into the New Year, with little reason to expect growth to pick up substantially. Average working hours and new orders in manufacturing have been weak, pointing to more slow growth in the industrial sector. However, employment, personal income and manufacturing and trade sales have all been rising, helping to offset the weakness in industrial production in recent months.”
In a press conference following the Fed’s decision not to raise interest rates, Fed Chair Janet Yellen said when the Fed does make a move, the “decision will not hinge on any particular data release or on day-to-day movements in financial markets. Instead, the decision will depend on a wide range of economic and financial indicators and our assessment of their cumulative implications for actual and expected progress towards our objectives.”
In addition to holding off on a rate hike, Fed officials lowered their long-run rate expectations. The “dot plot” shows that FOMC members trimmed their forecast for the fed funds rate to .40% for 2015, suggesting one rate hike this year, 1.4% for 2016, 2.6% for 2017 and 3.4% for 2018. The longer-run forecast was lowered to 3.5%.
Source: Federal Reserve
The OECD lowered its outlook for global economic growth to 3% for 2015, and 3.6% for next year, noting that weakness in China outweighs improvement in the US, and that “global growth will remain subpar in 2015. Some strengthening in growth is expected in 2016, but doubts about future potential growth continue to build”.
According to the latest GDP forecast from the Atlanta Fed, the economy will grow 1.5% in the third quarter.
Source: Federal Reserve Bank of Atlanta
According to the latest count from the Census Bureau, the number of builders dropped 50% between 2007 and 2012: new residential builders fell from 98,067 in 2007 to 48,557 in 2012.
According to the latest Current Population Survey, median household income slipped to $53,657 in 2014 from $54,462 in 2013. Adjusted for inflation, the median household made 6.5% less than it did in 2007 before the recession.