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
MACD- Negative
Money Flow Index-MFI-Positive
More on the Market and the Economy:
The market ended a choppy week with a decline on Friday following a mixed jobs report, with the S&P 500 dropping 1.53% for the day, and logging a 3.4% loss for the week (the second worst week of the year). Earlier in the week, the S&P 500 closed the month of August with a 6.3% decline, marking its worst month since 2012. The Dow finished the month down 6.6% – its worst month since 2010.
Source: dshort.com
This week data will be released on small business optimism, consumer sentiment and the Job Opening and Labor Turnover Survey.
Economic activity “continued expanding” across most districts, according to the Fed’s latest Beige Book. Eleven of the Fed’s twelve districts reported moderate or modest growth, while companies reported that the slowdown in China and the strong dollar were hurting business.
Speaking last Tuesday, IMF Managing Director Christine Lagarde said that the global growth outlook is weaker than projected two months ago: “We expect global growth to remain moderate and likely weaker than we anticipated last July. This reflects two forces: a weaker than expected recovery in advanced economies, and a further slowdown in emerging economies…”. Lagarde warned that market turmoil in China could spread to the global economy: “What has been demonstrated in the last few weeks is how much Asia is at the core of the global economy, and how much disruption in one market in Asia can actually spill over to the rest of the world.”
If fiscal problems aren’t resolved, monetary policy will “become irrelevant,” former Fed Chairman Alan Greenspan said on Friday. “Both [parties] have been afraid to touch the third rail of politics. The real problem has got nothing to do with monetary policy…it’s fiscal policy.” He also said that he is “baffled” that a 25 basis point rate hike by the Fed would have a major impact on global economic conditions.
Richmond Fed President Jeffrey Lacker said on Friday that the labor market has improved enough to start raising rates soon: “It’s time to align our monetary policy with the significant progress we have made”.
From the Census Bureau on the history of Labor Day:
“The first observance of Labor Day was likely on Sept. 5, 1882, when some 10,000 workers assembled in New York City for a parade. That celebration inspired similar events across the country, and by 1894 more than half the states were observing a “workingmen’s holiday” on one day or another. Later that year, with Congress passing legislation and President Grover Cleveland signing the bill on June 29, the first Monday in September was designated ‘Labor Day’.”
Source: Department of Labor