Tuesday, December 23, 2014

The Morning Call

The Morning Call


The Market

            The indices (DJIA 17959, S&P 2078) are close to or are challenging resistance levels.  For the Dow, the former high is 17991 and the upper boundary of its long term uptrend is 18957.  The S&P busted through the upper boundary of its long term uptrend (2075) for the second time.  If it remains above this level though the close next Tuesday, that boundary will have been successfully challenged.  Its former high is 2080 (which was reached during its first unsuccessful challenge).

            Meanwhile, the TLT continues to perform well (slowing economy or safe haven?) and GLD is again getting beaten up (no safe haven thesis, here).

            Free money still appears to be driving the bid.  Housing starts reported yesterday were not good; but the Bank of Japan announced that it would buy the entirety of new bonds issued by the government and Draghi’s QE is starting to get positive headlines again.  Buying stocks because central banks are making speculation cheap is not my idea of a reasonable or safe investment strategy.

            An inside look at this morning’s upbeat GDP report:

            And the lousy durable goods order number:

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