![]() At the moment it appears as though the market is not quite ready to overcome the long-term trend.Īs far as the chart goes, we need to pay attention to the fact that the long-term trend is down with lower highs, but since October we’ve also been experiencing higher lows. Maybe it’s coincidental that the S&P 500 was running up against the 200-day moving average and a long-term resistance line. The market was overbought last week and I think you had some profit-taking in combination with the negative reports. ![]() I think there’s a little more to it though. Put it all together and the market got spooked over recession fears. The consensus was -0.2%, but instead, we got -1.3%. Then you had another report released about Industrial Production that showed a significant decrease in production output month-over-month from November to December. Remember, that’s December’s data too, which includes the holiday season. The month-over-month data came in less than expected at -1.1% instead of -0.5%, which is showing a slowdown in retail sales. Part of the reason came from retail sales (excluding vehicles). The market gapped up at the open and the S&P 500 came close to the 4015 high we saw yesterday, but then it reversed and wiped out about an hour later. ![]() The number that the Fed likes to look at is the Ex-Food & Energy Y/Y and you can see from the chart below that it’s showing the core rate decreased from 6.2% in November to 5.6% in December. Overall the results were positive for the market. The Producer Price Index came out at 8:30 am yesterday and the market responded favorably. ![]()
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