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Market Direction Is Important –
Updated Chart of the S&P 500 and Secondary Signals
Of our Four secondary indicators under our MTI:
Relative Strength Index (RSI)-Positive
Chaikin Money Flow (CMF)-Positive
Money Flow Index-MFI-Positive
More on the Market and the Economy:
The market finished Friday with all three major indexes closing at record highs, and the S&P 500 ending the week with a 1.51% gain.
This week data will be released on existing home sales, new home sales, and the Fed’s FOMC meeting minutes.
The Conference Board’s leading economic index increased sharply in January, “pointing to a positive economic outlook in the first half of this year”. The report also noted that the “January gain was broad based among the leading indicators. If this trend continues, the U.S. economy may even accelerate in the near term.”
Small business optimism edged up again in January, reaching the highest level since December 2004, as the NFIB index rose to 105.9. According to the NFIB, “the stunning climb in optimism after the election was significantly improved in December and confirmed in January. Small business owners like what they see so far from Washington.”
Among the index components, five increased while five decreased, with many holding near record highs: “the continued surge in optimism is a welcome sign that economic growth is coming. The very positive expectations that we see in our data have already begun translating into hiring and spending in the small business sector”.
The Atlanta Fed’s GDPNow model forecast for first quarter growth rose to 2.4% following new residential construction data.
Homebuilder confidence slipped in February, with the NAHB housing market index falling to 65, as measures of current sales, sales expectations and buyer traffic declined. According to the NAHB, “with much of the decline this month resulting from a decrease in buyer traffic, builders continue to struggle to minimize costs while dealing with supply side challenges such as a lack of developed lots and labor shortages. Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed”.
Construction on new homes dipped 2.6% to an annual rate of 1.25 million in January. At the same time, permits to build new homes climbed 4.6% to an annual pace of 1.29 million.