March ISM = 57.2

Please forgive me, but I was very busy last week with traveling. I wasn’t able to get to the newsletter, but I promise it will return this week.

To be honest, there hasn’t been a lot of action on Wall Street lately. This morning, we learned that the ISM Manufacturing report for March came in at 57.2. That’s a decent number.

I like to track the ISM number because it tends to line up well with recessions and expansions. Recessions typically kick in when the ISM is 45 or less. Also, the ISM report comes out on the first business day of the month. For now, we’re not near a recession.

Even though the overall market has been flatlining recently, the Nasdaq Composite continues to climb higher. This is the danger in placing too much faith in an index. The rising Nasdaq really tells us more about the health of large-cap tech than the overall market.

A week ago, the S&P 500 dipped below its 50-day moving average. Crucially, it didn’t close below it. The index then briefly rallied, but the 50-DMA still lurks not far away. I’m going to keep an eye on this. Falling below support can often be a warning sign of bad things to come.

Posted by on April 3rd, 2017 at 11:28 am


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