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- Negative

4. Money Flow Index-MFI-Positive

More on the Market and the Economy:

Stocks rose on an upbeat jobs report, and both the S&P 500 and the Dow closed Friday at record highs, logging a seventh straight week of gains. The S&P 500 gained .4% for the week, and the Dow came within ten points of 18,000.

This week the market will see data on small business optimism, retail sales, producer prices, business inventories and the Job Openings and Labor Turnover Survey.

Federal Reserve officials went into the end of the year on an upbeat note, with the Fed’s Beige Book reporting that most of the central banks 12 districts were “optimistic” about the economic outlook. That optimism was driven by lower gas prices, increased holiday spending and employment gains. According to the report, contacts in a “number” of districts “remained optimistic about the outlook for future economic activity. Consumer spending continued to advance in most districts…Employment gains were widespread across districts, and districts reporting on business spending generally noted some improvement”.

Health care costs in the US rose at the slowest pace in over 50 years, according to a new report by actuaries from the Centers for Medicare and Medicaid Services. Health care costs grew 3.6% to $2.9 trillion in 2013, marking the smallest increase since 1960 (the US saw low spending growth for five years in a row resulting from the recession and the slow recovery). Not surprisingly, Medicaid bucked the trend and rose about 6.1% to $449 billion.

According to numbers recently released by the International Monetary Fund, China overtook the US in national economic output of goods and services in real terms. This year, China will produce $17.6 trillion, while the US will produce $17.4 trillion. Back in 2000, the US produced almost three times as much as China.

$2 gasoline made a return to the US last week: on Wednesday a station in Oklahoma City was selling gas for $1.99 a gallon, becoming the first to drop below $2 since July 30, 2010, according to GasBuddy.