Monday, April 18, 2016

Monday Morning Chartology

The Morning Call


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The Market

       Monday Morning Chartology

            The S&P had a good week last week, setting a higher high. But it was unsuccessful in its challenge of the upper boundary of its short term trading range.  Of course, it barely broke above that upper boundary and barely retreated below it.  So neither move holds a lot of significance.  On the other hand, the Dow did successfully challenge its short term trading range and reset to an uptrend on Friday.  However, I think that generally the S&P has a stronger gravitational pull than the Dow; in other words, I give the S&P more weight.  To round this out, (1) volume was weak including Friday which was an option expiration day and (2) the flow of funds indicator appears to be rolling over.

            I have included the chart on the dollar again because it continues trade in tandem with the market. I am not sure which is driving which.  In any case, you can see that the dollar unsuccessfully challenged the lower boundary of its short term trading range which, somewhat counterintuitively, is a plus for stocks.

            While TLT’s performance last week was not the great, it still remained within very short term and short term uptrends and above its 100 day moving average and a key Fibonacci support level.

            Gold continued to consolidate.  While it remained in a very short term downtrend, it recovered above a key Fibonacci support level.  Still more work to do but it sure looks like a bottom has been made.

            The VIX backed off last week, but it left the very short term downtrend broken and remained above the lower boundary of its short term trading range.  Depending on how the Market opens today, the Aggressive Growth Portfolio will likely Buy additional shares of VXX.  Please remember this is only for the strong of heart and it is a trade.


            The two indicators not included in last Friday’s note were industrial production (-0.6% versus -0.1% expected) and consumer sentiment (89.7 versus 91.8 expected).  The industrial production is by far the most important.  When coupled with the other primary indicator reported last week (retail sales), it may be stretching it to be optimistic.

            Another great piece on the economy and stock valuations from Lance Roberts (medium and a must read):

            Alternatives to stocks (medium):

            More on the financial state of JP Morgan (medium and a must read):

            Remember all those upbeat Chinese stats last week?  Here is the latest on what is going on in their bond market.  Who do you believe?

            Doha disappointment (short):

          Investing for Survival
            What every 25 year old should know about saving.

    News on Stocks in Our Portfolios
W.W. Grainger (NYSE:GWW): Q1 EPS of $3.18 beats by $0.32.
Revenue of $2.51B (+2.9% Y/Y) beats by $20M.

PepsiCo (NYSE:PEP): Q1 EPS of $0.89 beats by $0.08.
Revenue of $11.86B (-2.9% Y/Y) misses by $20M.


   This Week’s Data


            Deutschebank’s derivatives portfolio (short):



  International War Against Radical Islam

            9/11, congress and the Saudi new threat; this is going to get interesting (medium and a must read):

Visit Investing for Survival’s website ( to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

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