Monday, January 22, 2018

Monday Morning Chartology

The Morning Call
           
1/22/18

The Market
         
    Technical

            As has been the case of late, I will let the chart tell you all need to know.



            The long Treasury continues to weaken.  It is still in a no man’s land (between the upper boundary of a very short term downtrend and its 100 and 200 day moving averages on the upside and the lower boundaries of its short term trading range and its long term uptrend on the downside) though clearly it is moving into the lower level of that range, nearing the lower boundary of its short term trading range.  It broke below its 200 day moving average on Friday; if it remains there through the close on Wednesday, it will revert to resistance. 



            The dollar tried to stabilize last week but couldn’t generate enough energy to rally. 
This chart makes pretty poor reading if you own dollars---which we all do.  Reagan used to say that the dollar was the stock of a country.  A strong dollar meant global investors want to own the US and vice versa.  As I noted in Saturday’s Closing Bell, a continuation of this decline will, at some point, force the Fed raise interest rates (to defend the dollar) irrespective of what is occurring in the economy; and depending of the UUP’s rate of decline, much more aggressively than it might want.



            GLD has been on a good run.  Now it is challenging the lower boundary of its very short term uptrend.  Typically, it trades inversely to bonds and the dollar, which would suggest more room on the upside.



            The VIX pushed out of its short term downtrend and re-set to a trading range.  However, Friday’s negative pin action puts it near the lower boundary of that newly re-set short term trading range as well as its 100 and 200 day moving averages (both now support).



    Fundamental

       Headlines
           

    News on Stocks in Our Portfolios
 
            Paychex (NASDAQ:PAYX) declares $0.50/share quarterly dividend, in line with previous.

Economics

   This Week’s Data

      US

            The December Chicago Fed’s national activity index came in at .27 versus expectations of .25.

     International

    Other

            The Fed is scared of crashing the financial system (medium):

What I am reading today

            Why you should be working less (medium):

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