Monday, November 30, 2015

Monday Morning Chartology

The Morning Call


The Market

       Monday Morning Chartology

            Despite all the recent the post mid-November euphoria, the S&P looks to be making a lower high; not good for those looking for new highs. 

            Counterpoint (short):

            The key in this chart is the battle TLT is having with its 100 day moving average.  If it can’t successfully challenge it, then rates seem likely to rise; if not, then down---which would suggest recession.

            Is this an ugly chart or what?  How many times have I said that in the last year and a half?

            The VIX remains in a short term downtrend (good for stocks); but really it is simply trading in the range set in mid-2012.


            Last week became the third down data week in a row and the eleventh down week in the last thirteen. above estimates: the October trade deficit, month to date retail chain store sales, the September Case Shiller home price index, October durable goods, weekly jobless claims and the November PMI flash services index; below estimates: the October Chicago national activity index, November Markit manufacturing PMI, October existing home sales, third quarter corporate profits, weekly mortgage and purchase allocations, October personal spending, November consumer sentiment, November consumer confidence and the November Richmond Fed manufacturing index; in line with estimates: third quarter GDP, October personal income and October new home sales.

            Primary indicators slightly tipped to the negative side; but half of them were neutral: October durable goods (+), October existing home sales (-), October personal spending (-), third quarter GDP (0), October personal income (0) and October new home sales (0).

            Declining corporate cash flow (short):

            Overseas, the data was mixed---which is something of a positive, given the long string of almost completely bad news.  Positives: the November EU composite PMI, November German business morale, Japanese jobless claims, plus Draghi suggested that the coming round of QE will be even bigger than expected (although I would rate this a negative) and the Japanese government announcement that it would increase spending; negatives: Japanese consumer spending, the Swiss national bank pushed interest rate even further into minus territory, Turkey shot down a Russian fighter plane, an anti-austerity government was formed in Portugal and China s increased its pressure on its investment banking industry.

            There was also a couple of negative anecdotal numbers: commodity prices continued to nosedive and container freight rates are plunging.

            In sum, very little to warrant the holiday enthusiasm.

            ***overnight, Black Friday sales were disappointing.  The Fed announced that it is considering measures to curb ‘emergency lending power’, i.e. its ability to bail out specific banks (this is good news).

            Finally, another price paid for chasing yield (medium):

       Investing for Survival
            There is no such thing as a free lunch:

    News on Stocks in Our Portfolios

   This Week’s Data


            For all those dreamweavers who thought lower oil prices were an ‘unmitigated positive’ (medium):



  International War Against Radical Islam

            Believe or not: US is not bombing ISIS controlled oil fields for fear of the potential environmental damage (medium):

            Thoughts on the war on terror (medium):

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