The Morning Call
4/11/17
The
Market
Technical
The indices
(DJIA 20658, S&P 2357) inched higher, but as has been occurring with some
frequency of late, only after a big early intraday move. Both remained below the upper boundaries of
their very short term downtrends. Volume fell; breadth was mixed. The VIX (14.0) rose 9 %, ending above the
lower boundary of its very short term uptrend, above its 100 day moving average
(now support), above its 200 day moving average (now resistance; if it remains
there through the close on Thursday, it will revert to support) and above the
upper boundary of its a short term downtrend (if it remains there through the
close on Wednesday, it will reset to a trading range). Complacency remains an issue and we may be
looking at its demise.
The Dow closed
[a] above its 100 day moving average, now support, [b] above its 200 day moving
average, now support, [c] in a short term uptrend {19281-21635}, [c] in an
intermediate term uptrend {11915-24768} and [d] in a long term uptrend
{5751-23390}.
The S&P
finished [a] above its 100 day moving average, now support, [b] above its 200
day moving average, now support, [c] within a short term uptrend {2256-2589},
[d] in an intermediate uptrend {2084-2688} and [e] in a long term uptrend
{905-2591}.
The long
Treasury rose, remaining above its 100 day moving average (now support), below
its 200 day moving average (now resistance), below but near a minor resistance
level, in a very short term downtrend and in a short term trading range.
GLD was
unchanged, closing above its 100 day moving average (now support), below but
nearing its 200 day moving average (now resistance) and within a short term
downtrend.
The dollar was
down, ending above its 100 day moving average (now support), below its 200 day
moving averages, negating Friday’s break to the upside (now resistance), below the
upper boundary of its very short term downtrend and in a short term uptrend.
Bottom line:
yesterday, the Averages continue to trade in a very tight range dating back of
late March. As I noted above, they again
followed a frequent pattern of late, opening with a major directional move and
spending the rest of day giving most of it back. They have also faced a number of, what would
normally be considered, Market moving events---without moving. As a result, I have I opined that ‘it seems like no matter the import of a
headline (development), it is not enough to jar either buyers or sellers loose
from their pre-existing investment scenarios.
So it would appear that it will take something extraordinary to break
that mindset.’ I am sticking with
that conclusion.
Fundamental
Headlines
It
is a holiday shortened week with almost no economic data releases. In addition, congress has gone home for the
Easter vacation. So we can transition
from nothing getting done on the Trump/GOP fiscal agenda while it was in
session to nothing getting done while it is not---it should be less stressful. But not to worry, international issues have
stepped up with Syria and North Korea now capturing the headlines.
***overnight,
February EU industrial production disappointed; March UK inflation came in over
the BOE’s target; March German economic conditions index and investor sentiment
both rose; and March Chinese auto sales were better than expected.
Bottom
line: in the absence of groundbreaking developments in fiscal policy, I don’t
see how I can alter the assumptions in our Valuation Model beyond the modest
changes that I have already made as a result of the Donald’s efforts at
deregulation. Unfortunately, every day
that goes by, it seems like the odds of any major adjustments grow smaller. As
a result, at least according to our Model, equity valuations are very
rich. If you don’t believe me, read the
below review of multiple valuation measures.
If you haven’t taken profits on your winners and/or sold your losers,
there is still time.
A
thorough look at valuation (medium):
Can
the current market resilience last? (medium):
My
thought for the day: admitting that you are having problems in your
portfolio/investments is the first step toward solving them.
Investing for Survival
Investors
underperforming their own investments (medium):
News on Stocks in Our Portfolios
Economics
This Week’s Data
The
March small business optimism index came in at 104.7 versus expectations of
104.8.
Other
More
on student loans (medium):
More
on auto loans (medium):
Bankruptcies
are rising (medium):
The
hard road to tax reform (medium):
The looming national debt
(medium):
The
gap between hard and soft data continues to widen (short):
Politics
Domestic
Trump scraps his
tax plan (medium):
The millennial
metamorphosis (medium and a must read):
International War Against Radical
Islam
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
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