Monday, August 22, 2016

Monday Morning Chartology

The Morning Call


The Market

       Monday Morning Chartology

            At this point, one can’t challenge the directional bias of the S&P---the moving averages as well as the trend lines across all timeframes all point higher.  That said, volume has been light and momentum is slowing.  Notice on the right hand side of the chart: once prices broke to a new high, they made a brief advance then stalled for two weeks; then made another short hop up and again went sideways for another two weeks.   This slowdown in momentum could certainly prove temporary.  But it is something to watch.

            TLT remains above its 100 day moving average and within very short term, short term, intermediate term and long term uptrends; so the trend in prices (rates) is up (down) and will be until, at the very least the very short term uptrend is broken.  However, notice that the long Treasury has made three lower highs in a row and it has fallen out of that pennant formation (a technical negative).  I am not saying that bond prices are about to go lower; I am saying that there are indications that they might.  Again, it is something to watch.

            Aside from not being in a long term uptrend, the GLD chart looks a lot like the TLT---having made a new high in early July then building a pennant formation (lower highs, higher lows) since.  Based on the trend lines, there is no reason to question GLD’s direction at the moment.  But like TLT, this is a chart to be watched.

            It sure looks like the VIX is going to challenge the lower boundary of its intermediate term trading range.  That is good news for stocks.  The bad news is that the VIX is only one point (10%) away from that boundary (support level).  That doesn’t mean that it can’t go lower.  But like every other chart on this page, it needs to be watched for signs of a directional change.


            Over the weekend, Stanley Fisher, vice chair of the Fed, gave a very hawkish speech.

             Summary of recent Fed statements (medium):

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            Sticking with your investment discipline.
    News on Stocks in Our Portfolios
            Medivation (Aggressive Growth Portfolio) to be acquired by Pfizer for $81.50.


   This Week’s Data

            The July Chicago National Activity Index was reported at .27 versus the prior revised reading of .05.


            Quote of the day (short):

            The latest from Jeffrey Snider (medium):



Oh, good.  Princeton has created for all of us a new guide to avoid gender binary hate speech.  What for changes in this newsletter.  (yeah, right)

  International War Against Radical Islam

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