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Market Update

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)-Negative

  3. MACD- Negative

  4. Money Flow Index-MFI-Negative

More on the Market and the Economy:

Stocks slumped on Friday, ending January in the red. The S&P 500 posted a weekly loss of 2.8%, and dropped 3.1% for the month…its worst monthly decline in a year.

Source: dshort.com

The yield on the 10-year Treasury finished January by recording it biggest one-month decline since mid-2011, while the yield on the 30-year hit an all-time low. For the month, the 10-year yield dropped 49.4 basis points, its steepest one-month plunge since falling 58.8 basis points in August 2011.

Gold rebounded on Friday in response to the weaker-than-expected GDP report, ending January 8% higher, marking its best monthly gain in three years. After January’s gain, a proxy for gold, SPDR Gold Trust (GLD), has yet to signal a long-term buy.

This week the market will digest data on personal income and spending, construction spending, manufacturing, the service sector, the trade deficit and the jobs report.

Consumers came to the rescue in the fourth quarter: looking at the contributions to GDP, the economy’s 2.6% growth was driven by a 4.3% climb in consumer spending (consumer spending accounts for 70% of the economy). Households spent on recreation and clothing while business spending slowed.

Source: dshort.com

For the first time in five years, Americans cite defending the US against terrorism as the top policy priority. Defending the US has been among the public’s top priorities since 2002, but its now edged to the top as the economy and jobs have slipped.

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