Monday, January 14, 2019

Monday Morning Chartology


The Morning Call

1/14/19

The Market
         
    Technical

            The S&P was down fractionally on Friday.  Notice that it has struggled the last few trading days, unable to push above a former support level (purple line).  It is also facing resistance from the upper boundary of its short-term downtrend and the 61.8% Fibonacci level (a significant retracement [resistance] level).  It remains solidly below both MA’s, with the 100 DMA about to push below its 200 DMA (a negative).  Finally, breadth is rolling over.  The one bright spot is that it still trades within a very short-term uptrend.  These indicators suggest that short term weakness.  Whether that is a retreat in a developing uptrend or the last gasp before challenging its December low remains to be seen.

            And:




            The long bond was up 3/8 %, ending above both MA’s, in a very short-term uptrend, a short-term trading range and appears to have failed to challenge its prior higher low.  That keeps this chart strong, suggesting that rates have peaked, at least, short term.



            The dollar was up again on Friday though not by much.  Still it remains above both MA’s and it a short-term uptrend, though it has struggled to make a new high of late.  This performance suggests investors are either betting that the US is going to be the strongest economy in a coming global slowdown or that interest rates are going up---which I doubt.



            The GLD chart has gone from being ugly to, at least, tolerable.  It remains above both MA’s, in a short-term trading range and well above the lower boundary of a very short-term uptrend.  This pin action would be compatible with lower rate/weaker economy scenario.



            The VIX had a much bigger down day on Friday than I expected on small down Market day.  Of course, it has not fallen nearly as much as I anticipated on several recent large down day.  So, it appears that there is some catch up in the pin action.  As you can see, it ended below (1) the lower boundary of its very short-term uptrend [if it remains there through the close today, the trend will be voided] and its 100 DMA [now support; if it remains there through the close on Tuesday, it will revert to resistance].  While it remains above its 200 DMA and in a short-term uptrend, the VIX’s chart is threatening to deteriorate which would be a plus for stocks.


                 

    Fundamental

       Headlines

            Jeff Gundlach: we are swimming in an ocean of debt.

            Goldman lowers its 2019 profit growth forecast.


    News on Stocks in Our Portfolios
 
           

Economics

   This Week’s Data

      US

     International

December Chinese exports fell 4.4% versus expectations of a rise of 2.2%; imports dropped 7.6 versus estimates of a 3.4% increase.


            November EU industrial production declined 3.3% versus forecasts of down 2.1%.


    Other

What I am reading today

            Quote of the day.

                        France and Germany merge economic and defense polices---something Hitler could not do.


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