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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)-Positive

  3. MACD- Negative

  4. Money Flow Index-MFI-Negative

More on the Market and the Economy:

Last Thursday, stocks fell for the fifth day in a row, with the S&P 500 finishing below 2,000 for the first time in a month, as the markets were shocked by the Swiss National Bank’s move to scrap its euro exchange cap (Swiss stocks tanked sunk the most since 1989 following the move).

Stocks ended the week on a better note, rebounding on Friday with a rally in oil prices and mixed economic data. The S&P 500 posted its third consecutive weekly loss, slipping 1.2%, while the Dow ended the week down 1.3%.

Source: dshort.com

Last Monday the ten-year Treasury yield hit the lowest closing level since May 2013, and continued lower through the week before reversing on Friday with a 10 basis point jump to 1.83%.

The Fed’s latest Beige Book reported that economic activity in its 12 districts continued to expand at a “modest” to “moderate” pace, driven by gains in consumer spending. At the same time, the drop in oil prices was starting to have a troubling impact in Texas and other regions, with reports of hiring freezes and layoffs as demand for oilfield services fell.

This holiday-shortened week will absorb data on housing starts, existing home sales and leading economic indicators.

The World Bank cut its outlook for the global economy for this year and next because of the “sputtering” recovery in the euro zone and Japan, and “less dynamic” prospects for emerging economies. The bank lowered its forecast for global growth to 3% this year and 3.3% in 2016, followed by a dip to 3.2% in 2017, noting that “the global economy is at a disconcerting juncture”. The US is a bright spot, with the projection for growth increased to 3.2% for this year. But that upbeat news came with a warning: “the global economy is running on a single engine…the American one. This does not make for a rosy outlook for the world”.

Source: World Bank

The US government ran a $2 billion budget surplus in December, as government spent $333 billion while bringing in $335 billion, bringing the deficit for the first three months of fiscal 2015 to $177 billion.

The 114th Congress is the most diverse in history, according to Pew Research, as one-in-five members of the House and Senate are a racial or ethnic minority.

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