Market Summary

The GDP (Gross Domestic Product) is the the broadest measure of economic activity and reflects a measure of all goods and services produced in a country during a period of time. Quarterly GDP reports are broken down into three announcements: advance, preliminary, and final. The advance quarterly GDP report was released Thursday for Q3 and showed a 3.5% growth rate and an end to the recession according to the GDP. Prior results are as follows: Q2 GDP 2009 -0.7%, Q1 GDP 2009 -6.4%, Q4 GDP 2008 -5.4%, Q3 GDP 2008 -2.7%. The good news of the first positive results in the GDP in a year sent the markets up on Thursday only to see all those gains given up and then some on Friday with a strong sell off.

The image below is my current market timing model. It is a composite reflecting different time frames with the background color of the chart reflecting the trend in the respective time frame. As the background color, either pink or light green, shifts to the left of the image that trend, either up or down, is established. The gap open higher on Thursday, noted by the colored oval on the hour chart, was completely filled on Friday as prices continued their move to the downside. Sentiment is bearish on the short and intermediate term but bullish long term. Click on image to enlarge.


The chart below is of the monthly NASDAQ and shows October having the first monthly decline in prices on the NASDAQ since February. While the trend is still to the upside it must maintain prior support levels as indicated by prior months lows to keep moving to the upside. The market may be in the process of turning down and we will have to watch this closely. Click on chart to enlarge.

The table below shows the price performance of the followed ETFs over several time frames. As can be seen all markets were down for the week with EEM and $RUT leading to the downside. Click on table to enlarge.