The Morning Call
The Market
Technical
The indices
(DJIA 12815, S&P 1380) finished basically flat on the day. Both closed for the fourth day below the
lower boundary of their short term trading range. That confirms the break of this range. They will now re-set to a short term
downtrend marked by these values: 12708-13200, 1375-1424.
In
addition, the Dow finished for the fourth day below its 200 day moving average
(12991)---confirming the violation of this indicator. The S&P needs one more day to confirm the
penetration of its own moving average (1381).
However, since it has hovered just below this resistance point, I may
wait for a fifth day before making the call.
Both
continue to trade above the lower boundaries of their intermediate term
uptrends (12732-17732, 1343-1939).
Volume
was down---not unusual for a semi-holiday; breadth was mixed. The VIX fell more than 10%---highly unusual
for a do-nothing day. It violated the
lower boundary of its very short term uptrend---and because the trend is very
short, it only takes two days to confirm the break. It remained within the zone between the upper
boundary of its short term downtrend and the lower boundary of its intermediate
term trading range.
Bottom
line: at the close yesterday, the
Averages confirmed the break of their short term trading ranges and are
re-setting to short term downtrends. In
addition, the DJIA has busted through its 200 day moving average; and the
S&P doesn’t appear to be far behind.
If that happens, then we have to assume that the lower boundaries of the
intermediate term uptrends will be challenged.
Finally, stocks are oversold enough that one would expect some kind of
bounce; but that has failed to materialize thus far.
Clearly, this is
not an inspiring technical performance and doesn’t bode well for future prices.
All that said,
another stock goes on our Buy List and the S&P is now below Fair Value. My focus is now on (1) those stock closing in
or near the Buy Value
Ranges Buy
Value Range
The
latest from Dick Arms (medium):
Apathy
reigns supreme (short):
Fundamental
Headlines
No
economic data today and most of our political news was centered either on
Veteran’s Day celebrations, who is diddling who at the CIA
or more pissing and moaning about the fiscal cliff. The rest of the news was from abroad and it
wasn’t good: third quarter Japanese GDP
down; September Indian industrial production down, Spanish bonds down, Greek
bank stocks down. None which makes me
want to run out and load up.
***overnight
the EU finance ministers agree to extend period for Greece
And
(medium):
Bottom line: ‘the economic fundamentals ex the fiscal
cliff and the euro disaster are progressing as well as we could hope given the
burdens the economy must shoulder. I do
believe that the fiscal cliff gets fixed however dysfunctionally; and as a
result, ex the significant downside presented by a failure in Europe , our Portfolios would be starting to
nibble at current levels.
However, the aforementioned downside in Europe is of such a magnitude that I think that
stocks prices need to suffer an additional haircut before they compensate us
for assuming the risk of ownership.’
The
latest from John Hussman (medium):
Subscriber Alert
The
stock price of Amerigas Ptrs (APU -$40) has
traded below the upper boundary of its Buy
Value Range APU . No additional shares will be purchased at
this time.
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