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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 finished the week with a rally following news that China’s central bank made its first interest rate cut in over two years. In a surprise move, the People’s Bank of China cut its one-year lending rate and its one-year deposit rate – the first cut since July 2012.

The S&P 500 recorded its 45th record close of the year on Friday, and finished the week with a 1.2% gain – its fifth consecutive weekly gain. The Dow posted its 28th record close for the year on Friday.

This holiday- shortened week will see the release of data on home prices, GDP, durable goods orders, personal income and spending, new home sales and pending home sales.

The minutes from the Fed’s October 28-29th meeting, released last week, showed that there was a push by some officials to say more publicly about the pace of rate hikes. The committee voted 9-1 to end its asset purchase program and reiterated that interest rates will probably remain near zero for “a considerable time”. While “most” supported keeping that language, a “number” of officials “thought it could soon be helpful to clarify the FOMC’s likely approach”.

The Conference Board’s Leading Economic Index rose sharply in October with gains on all components. “Despite a negative contribution from stock prices in October, and minimal contributions from new orders for consumer goods and average workweek in manufacturing, the LEI suggests the U.S. expansion continues to be strong”, according to the report. “The upward trend in the LEI points to continued economic growth through the holiday season and into early 2015. This is consistent with our outlook for relatively good, but not great, consumer demand over the near term. Going forward, there are continued concerns about slow business investment and lackluster income growth.”

Americans can get used to lower gas prices, according to Energy Information Administration. The EIA lowered its outlook, predicting that the average price of gasoline will be $2.94 a gallon next year… a 44 cent drop from the outlook released one month ago. If that proves to be true, consumers will save $61 billion on gas compared to this year.

This is not much of a surprise: Americans spend a lot of time watching tv. According to the Labor Department’s latest American Time Use Survey, the average American spent 2 hours and 48 minutes watching tv everyday in 2013…accounting for more than half of Americans’ total leisure time.

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