The Morning Call
1/22/19
The
Market
Technical
The
S&P remains in its Titan III formation, wiping out one resistance level
after another. It has blown through the
61.8% Fibonacci retracement level as well as the upper boundary of its short
term downtrend like a hot knife through butter---the latter having reset to a
short term trading range. If it closes
above that level today, my assumption will be that the December 24 low was a
bottom. Not that it can’t be tested; but
from this point, I feel a bit less apprehensive putting money to work, should
any of our stocks trade into their Buy Range.
The problem, of course, is that stocks, at least as measured by the
S&P, continue to be grossly overvalued.
So, I will also be looking to take money off the table if any of our
holding trade into their Sell Half Range.
The
Merk chartbook.
The
long treasury fell ½% on Friday, capping week of poor pin action. As you can see, it failed to make a new
higher low---pointing to a loss of near term upward momentum. On the other hand, it remains above both MA’s,
in a very short term uptrend and in a short term trading range. Until or unless those support levels start
giving way, the assumption is that rates are not going meaningfully higher.
The
dollar had a good week, culminating with a strong Friday on good volume. It continues to trade above both moving
averages, in a short term uptrend and is approaching the upper level of the mid
November to present consolidation phase.
At the moment, there is no reason to doubt that the dollar is moving
higher.
GLD
was down almost a point on Friday. But
that is following a great two month uptrend; so, some backing and filling makes
sense. Other than this one day hiccup,
the chart remains strong.
The
VIX was down last week. Something to be
expected in a week in which the S&P was up more than 2 ½ %. What was striking was how small its relative
decline. Still, it finished below its
100 DMA for a second day (now support; if it remains there through the close on
Tuesday [Market closed on Monday], it will revert to resistance). On the other hand, it remains above its 200
DMA and in a short term uptrend.
Fundamental
Headlines
So
much for Trump’s ‘big’ announcement.
News on Stocks in Our Portfolios
Revenue of $3.94B (+7.9% Y/Y) beats by $70M.
Revenue of $8.18B (flat Y/Y) beats by $140M.
Johnson & Johnson (NYSE:JNJ): Q4 Non-GAAP EPS of $1.97 beats by $0.02;
GAAP EPS of $1.12 misses by $0.83.
Revenue of $20.39B (+0.9% Y/Y) beats by $190M.
Economics
This Week’s Data
US
International
Fourth
quarter Chinese GDP rose 1.5% versus up 1.6% in the third quarter; December
Chinese fixed asset investments advanced 5.9%, in line; industrial production
was up .54%, also in line; retail sales grew 8.2% versus estimates on up 8.1%.
Other
IMF
cuts its global growth forecast.
Are risks piling
up in the leveraged loan market?
John
Mauldin looks at China.
Xi
warns of serious dangers to communist party rule.
US
confirms plans to extradite Huawei executive.
What
I am reading today
The ‘yellow vests’ are unstoppable.
Remembering Jack
Bogle and Herb Kelleher.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
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