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Market Update

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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:

  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:

Stocks slipped on Friday, but the S&P 500 posted a second consecutive weekly gain, finishing the week up 1.2%, thanks to a Fed-fueled rally on Wednesday.

Source: dshort.com

This week data will be released on new home sales, pending home sales, the trade deficit and GDP.

The Fed held off on a rate hike for the sixth straight meeting, noting that “near-term risks to the economic outlook appear roughly balanced…the Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.” The FOMC statement also noted that “although the unemployment rate is little changed in recent months, job gains have been solid, on average. Household spending has been growing strongly but business fixed investment has remained soft.”

The Conference Board’s leading economic index slipped .2% in August: “While the U.S. LEI declined in August, its trend still points to moderate economic growth in the months ahead. Although strengths and weaknesses among the leading indicators are roughly balanced, positive contributions from the financial indicators were more than offset by weakening of nonfinancial indicators, such as leading indicators of labor markets, suggesting some risks to growth persist”.

The Atlanta Fed’s GDPNow model forecast for third quarter growth slipped to 2.9% following the release of housing starts numbers.

Builder confidence jumped in September, with the NAHB housing market index rising to 65,marking the highest level since last October, as “builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move forward”. The NAHB also reported that “with the inventory of new and existing homes remaining tight, builders are confident that if they can build more homes they can sell them. Though solid job creation and low interest rates are also fueling demand, builders continue to be hampered by supply-side constraints that include shortages of labor and lots”.

Source: NAHB

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