Tuesday, February 16, 2016

Tuesday Morning Chartology

The Morning Call


The Market

       Tuesday Morning Chartology

            Friday’s pin action brought relief for the bulls.   However, at this point in time, (1) Friday looked like nothing but a rebound from an oversold position, (2) the S&P is in very short term, short term and intermediate term downtrends and (3) it could not recover the 1867 level.  That doesn’t mean a bottom hasn’t been made; but stocks have a lot of work to do to change the downward momentum.

            The long Treasury had a strong week, the Friday down close notwithstanding.  It could not successfully challenge the upper boundary of its intermediate term trading range.  That is not particularly unusual since the intermediate trend tends to provide solid support/resistance.  On the other hand, last week’s powerful spike clearly over extended TLT to the upside.  It could do some more backing and filling; but the momentum remains to the upside.

            If the TLT price performance is a spike, then GLD is a moonshot.  Of course, it is much less liquid, so the higher volatility is not surprising.  But look at the volume (bottom of chart).  Somebody thinks something major has changed; and generally when gold roars the Market does just the opposite.  Along those lines, note that GLD retreated 0.59% on Friday while the S&P was up 1.95%; in other words, the GLD buyers were not that impressed with the motivations of the stock buyers.

            There has been and will likely continue to be a lot of speculation on where oil and gas prices bottom out.  I haven’t a clue.  But I wanted to show (purple lines) the support level that energy has attempted to challenge several times without success.  So not too much should be read into last Friday’s bounce.


            Last week was a slow one for US economic data; but overall the trend remained negative (three indicators up, five down and two neutral).  In addition, the one primary indicator (retail sales) fell in the neutral group.  That puts the trend count at four up to mixed weeks and twenty down weeks out of the last twenty four.  Small wonder investors are worried about recession.      

            ***overnight, fourth quarter Japanese GDP fell 1.4% versus expectations of down 0.8%; January Chinese exports and imports were down even more than anticipated.

            In addition, Saudi Arabia and Russia agreed to ‘freeze’ crude oil output contingent on other OPEC members agreeing to go along.  Iran was unavailable for comment.

            This from a top hedge fund manager (medium):

                        China now trying to sell its nonperforming loans to the US (short):

            Negative interest rates, deficits and defaults (medium):

       Investing for Survival
            When diversification works.

    News on Stocks in Our Portfolios
Genuine Parts (NYSE:GPC) declares $0.6575/share quarterly dividend, 6.9% increase from prior dividend of $0.615

Hormel Foods (NYSE:HRL): FQ1 EPS of $0.43 beats by $0.06.
Revenue of $2.29B (-4.6% Y/Y) misses by $110M.


   This Week’s Data

            The February NY Fed manufacturing index was reported at -16.64 versus expectations of -10.00




The latest immigration stats (medium):

  International War Against Radical Islam

            The latest from Syria (medium):

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