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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)-Positive

  2. Chaikin Money Flow (CMF)-Positive

  3. MACD- Positive

  4. Money Flow Index-MFI-Positive

More on the Market and the Economy:

The market was feeling cheerful ahead of the holiday last week: on Tuesday, the Dow rallied past 18,000 for the first time following news that the economy grew at the fastest pace since 2003.

Tuesday’s move above 18,000 marked 120 trading sessions (or 172 days) since the Dow closed above 17,000 on July 3rd – making this the fifth fastest 1,000 point rise in the index’s history (the fastest being its rise to 11,000 back in 1999…which took 24 sessions).

Source: WSJ Market Data Group

The holiday cheer extended to the end of the week, with the Dow posting its 38th record close of the year on Friday, and the S&P 500 posting its 52nd record close (on light volume).

The rally included small-caps as well, with the Russell 2000 reaching an all-time high on Friday. After a solid run in 2013, the index hasn’t had a smooth year, and is recovering from an 11% correction after hitting a one-year low on October 13th. The index has surged 16% since then.

This week, the market will see data on consumer confidence, pending home sales, manufacturing and construction spending.

The percentage of Americans who believe that it is a good time to find a quality job is back at pre-recession levels, with 36% saying the time for find a good job is now, according to a new Gallup poll. That marks the highest percentage since November 2007, before the recession. The highest, 48%, was reached in January 2007, and the lowest, 8%, was last reached in November 2011.

One in five investors has tapped into a 4019(k) early, according to the Wells Fargo/Gallup Investment and Retirement Optimism Index. Among investors that participate in a 401(k), 21% have taken out a loan or an early withdrawal in the past five years. What’s really troubling is that while a fifth of investors have tapped into their plan early, barely more than half, just 55%, say they understand the tax consequences “very well”. Even worse: 5% don’t understand the consequences “at all”.


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