Monday, October 24, 2016

Monday Morning Chartology

The Morning Call


The Market

       Monday Morning Chartology

            While the S&P has reset to a short term trading range and successfully challenged its 100 day moving average, reverting to resistance, there has been no real follow through to the downside.  As I have been repeating for the last month, stocks appear to be stuck in a very tight range probably a result of the lack of clarity on a number of fundamental issues.

            TLT spent the week in a very narrow range (much like stocks and gold).  On the positive side, it has remained well within uptrends across all major timeframes and it held above a key Fibonacci level.  The bad news is that it has pushed through its 100 day moving average with authority and is developing a very short term downtrend.  At the moment, the chart is sound (suggesting higher prices) though it is developing some warts.

            You can see that the dollar is on a sizz.  That is not good for gold, the US trade balance or US based companies with a large international exposures.

            Even though GLD has busted to the downside through its 100 day moving average and has reset to a short term downtrend, it has held above a key Fibonacci level.  That is a start; but just only.  The pin action needs to improve a lot more before I start getting enthusiastic about GLD. 

            The VIX got pummeled last week, including being down on down Market days.  It is now below its 100 day moving average (resistance) and in a short term downtrend.  However, it is also in a very short term uptrend which has been set by five higher lows---a good sign of strength at lower levels.  As you can see, the VIX is again nearing that trend line.  If it holds, that would be a sign that stocks are about as good as they are going to get.



            Goldman cuts S&P earnings outlook (medium):

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            Ten purchases that are worth the money.

    News on Stocks in Our Portfolios
Kimberly-Clark (NYSE:KMB): Q3 EPS of $1.52 misses by $0.02.
Revenue of $4.59B (-2.8% Y/Y) misses by $140M.

            V.F. (NYSE:VFC): Q3 EPS of $1.19 beats by $0.04.
Revenue of $3.49B (-1.1% Y/Y) misses by $140M

AT&T (NYSE:T) declares $0.49/share quarterly dividend, 2.1% increase from prior dividend of $0.48.

            AT&T (NYSE:T): Q3 EPS of $0.74 in-line.
Revenue of $40.89B (+4.6% Y/Y) misses by $260M


   This Week’s Data

            The September Chicago national activity index came in at -.14; August was revised from -.55 to -.72.

            ***overnight, the October EU Markit manufacturing, services and composite PMI’s were all better than expected as was the Japanese October manufacturing PMI; October Japanese exports fell.





            The US/Russia relations continue to deteriorate (medium):
            Iraq wants exemption from OPEC production cuts (medium):

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