Sunday, January 11, 2009

Money Flow and Economic Perspectives

As we can see from the top chart, cumulative money flow for the Dow 30 stocks has turned lower in the last week, but remains well above its December low. If we take a look at the four-day moving average of money flow (bottom chart), we can see that it has turned negative after a modest but prolonged stay in positive territory. Note that, like volatility for the stock market overall, flow numbers have grown more modest, both to the upside and downside. Bulls will want to see a shallow and relatively brief pullback in the four-day average before resuming a positive run.

The helpful online WSJ site data show that money flows for the week were strongest for the health care and technology sectors and weakest for financials. This very much fits with the observations of Technical Strength among the sectors. As always, I will be updating money flow numbers prior to each market open via Twitter (free subscription).

While on the topic of online WSJ, here are some links to valuable economic perspectives:

Overview of Fed actions

Calendar of Coming Economic Reports

Excellent Overview of Economic Data