Monday Morning Chartology
The S&P successfully challenged its 100 day moving average and the lower boundary of its short term uptrend last week and is building a very short term downtrend; so momentum is fading at least for the moment. As you can see, if it pushes below the 2133 support level, it has a ways to go before encountering additional support.
October options expiration prone to wild swings (short):
The long Treasury had another lousy week. It is now below its 100 day moving average, in a very short term downtrend and is challenging another Fibonacci support level and its 200 day moving average. However, it continues to trade within uptrends across all timeframes; so all is not tears and rain. But TLT is getting closer to challenging its short and intermediate term uptrends.
GLD is attempting to stabilize at a Fibonacci level. Given its violation of its 100 and 200 day moving averages and it resetting to a short term downtrend, which might be a tall order.
Volatility picked up last week. While it is off its high, it is nonetheless over its 100 day moving average and in a very short term uptrend---not good for stocks. Still it remains in a short term downtrend. Until that resistance gets successfully challenged, I have to assume that momentum is to the upside.
There was not a lot of data released last week. What we got was mostly negative. Further, there was only one primary indicator recorded: September retail sales and they were in line. So the week was negative but flimsy. Indeed, I am tempted to not even score it; but data is data and I have to work with what I am given. The score is now: in the last 56 weeks, sixteen were positive, thirty-six negative and four neutral.
Overseas, this was the strongest week (I know I have said that several times of late) in some time. While it is still too soon to know, the good news may be that the global economy has finally stopped decelerating. The potential bad news (for investors) is that the Fed has used the weak world economy as a major reason for not raising rates.
The central banks were the usual busy little beavers. The Bank of Japan walked back the slightly more hawkish tone of their last communique; and the Wednesday release of the last FOMC minutes also read a bit more dovish. I assume that means that QE is still the game plan and that the December rate hike is less probable---although as you know, I have never thought that we would get one anyway.
The latest on Deutschebank (medium):
***overnight, both Yellen and the ECB suggested that they might join the BOJ in its yield curve ‘steepening’ policy. (medium and a must read)
China upping stimulus (medium):
Back in the headlines are the third quarter earnings reports which started off on a sour note (and this is a big week). Of course, we are still in the early stages; so it is too soon to be making judgments about how they will turn out. That said, if they remain subpar that is not likely a plus for the Market.
The latest from Doug Kass (medium):
Investing for Survival
The most complicated simple problems
News on Stocks in Our Portfolios
This Week’s Data
The October NY Fed manufacturing index came in at -6.8 versus expectations of +1.0.
The flawed logic of inflation (medium):
Inflation and the Fed Funds rate (short):
The Atlanta Fed lowers its third quarter GDP growth estimate again (short):
Drowning in debt (medium):
1.4 million Americans will lose their healthcare coverage in 2017 (medium):
International War Against Radical Islam
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