Monday, November 2, 2015

Monday Morning Chartology

The Morning Call


The Market

            Monday Morning Chartology

            The S&P continued to surge last week, pushing above its 200 day moving average, reverting from resistance to support and its short term downtrend, re-setting to a trading range.  It sure looks like it has its all-time high and the upper boundary of its long term uptrend in its sights.

            Regression to trend (short and a must read):

            The long Treasury remains within multiple trading ranges and continues to develop a pennant formation---but doesn’t show that bond investors have much confidence in a December Fed rate hike.

            Gold is now challenging its 100 day moving average to the downside; though it remains in a short term uptrend.  It continues to struggle to mark a bottom.

                The dollar is challenging the upper boundary of its very short term downtrend, reflecting that somebody is willing to bet on a December rate hike.

            The VIX clearly supports the rise in the S&P.  However, the 12-13 area still represents an attractive price for portfolio insurance.


            Last week’s data returned to its negative trend (nine of the last ten weeks): above estimates: month to date retail sales, the October Richmond Fed manufacturing index, the September US trade balance, the October Chicago PMI and weekly jobless claims: below estimates: new home sales, the October Dallas Fed manufacturing index, September durable goods orders, the October Markit services flash PMI, October consumer confidence, weekly mortgage and purchase applications, September pending home sales, September personal income and spending, October consumer sentiment and third quarter GDP.  Unfortunately, not only was the aggregate data negative, the primary indicators were all disappointing (new home sales, durable goods orders, personal income and spending and third quarter GDP).


***overnight, October Chinese manufacturing PMI was below expectations, EU PMI was above estimates, UK PMI was much better than anticipated, the ECB said that Greek banks must raise $15.9 billion in new capital to offset prior losses and Puerto Rico failed to file audited financial statements on October 31 due date.

            Yet somehow the Fed missed all of this and altered the tone of its statement from its meeting to more hawkish, reinforcing the notion that the FOMC meetings are just a giant circle jerk.  Whatever these guys (and gal) think that they are accomplishing, I don’t believe that their objectives will be met and that ultimately history will not be kind to them.

            Overseas, the data was sparse but it was balanced.

            Update on the Buffett indicator (medium):


   This Week’s Data


            Mohamed El Erian on the FOMC meeting (medium):

            Goldman: the ECB’s monetary policy hasn’t worked (medium):



  International War Against Radical Islam

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