Monday Morning Chartology

The Morning Call

12/2/13

The Market

           

    Technical

       Monday Morning Chartology   

            All systems remain on go.

            The long Treasury looks like it is trying to build a head and shoulders formation---which if it happens would be bad for bonds (prices down, yields up).

            GLD continues to trade down.

            The VIX has settled at the low end on its short term trading range; a break below would be positive for stocks.

            More on sentiment (short):

            http://www.zerohedge.com/news/2013-11-29/what-happens-when-chart-hits-zero

            The latest from Citigroup (medium):

            http://www.zerohedge.com/news/2013-11-29/citi-skeptical-sustainability-uptrend

            Secular bull and bear markets (medium):

            http://advisorperspectives.com/dshort/updates/Secular-Bull-and-Bear-Markets.php

    Fundamental

    

            This author argues that tapering is not the same as raising interest rates.  On the surface I agree---but if the Fed isn’t buying $85 billion of government debt a month then someone else has to.  And they will likely be a bit more price conscious than the Fed; which means medium and long term rates can go up without the Fed raising the Fed Funds rate.  And in fact if they go up a lot will could force the Fed to raise the Fed Funds rate whether it wants to or not (medium):

            http://www.washingtonpost.com/blogs/wonkblog/wp/2013/11/27/markets-used-to-freak-out-over-tapering-qe-the-fed-has-persuaded-them-not-to/?wprss=rss_ezra-klein         

  

            Growth in the global economy (short):

            http://www.zerohedge.com/news/2013-11-29/when-they-say-global-economy-growing-they-really-mean

            Lance Roberts gives us more to think about (medium):

            http://advisorperspectives.com/dshort/guest/Lance-Roberts-131127-Things-to-Ponder.php

            The problem with over reliance on monetary policy (medium):

            http://www.zerohedge.com/news/2013-12-01/central-banker-admits-faith-monetary-policy-safeguard-leads-even-less-stable-world

            The latest from John Mauldin (medium):

            http://advisorperspectives.com/commentaries/millenium_113013.php

   News on Stocks in Our Portfolios

 
Tiffany & Co beats by $0.15, beats on revenues

·                                 Tiffany & Co (TIF): Q3 EPS of $0.73 beats by $0.15.

·                                 Revenue of $911M (+7% Y/Y) beats by $21.49M.

·                                 Comparable store +3%.

Economics

   This Week’s Data

   Other

            EU unemployment declines (short):

            http://www.zerohedge.com/news/2013-11-29/european-unemployment-declines-all-time-high-youth-unemployment-hits-fresh-record-fu

            ***over night, Thanksgiving weekend sales were 2.7% below last year; Chinese PMI came in above forecast while EU PMI was up slightly.

Politics

  Domestic

  International

            Krauthammer on the Iranian nuke deal (medium):

            http://www.washingtonpost.com/opinions/charles-krauthammer-suckers-deal/2013/11/21/9d03e966-52dc-11e3-a7f0-b790929232e1_story.html

            Iran on the Iranian nuke deal (medium):

            http://freebeacon.com/iran-white-house-lying-about-details-of-nuke-deal/

            And:

            http://www.zerohedge.com/news/2013-11-29/irans-rouhani-we-are-not-dismantling-our-nuclear-facilities-iran-will-maintain-its-u

Meanwhile, the tensions between Japan and China are rising (medium):

            http://www.zerohedge.com/news/2013-11-28/china-declares-willing-engage-protracted-confrontation-japan-prime-target

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Investing For Survival is to help other investors build wealth and benefit from the investing lessons he learned the hard way.