The Morning Call---Goldman calls a bottom in software

 

The Morning Call

 

2/6/26

 

The Market

         

    Technical

 

            Thursday in the charts.

            https://www.zerohedge.com/markets/bullion-bitcoin-big-tech-bloodbath-continues-bonds-joltd

 

Note: the S&P traded down to its 100 DMA (~6794) and bounced slightly (6798). Clearly, the selloff isn’t positive (although holding its 100 DMA is). In addition, (1) the short term narrative [see above] is anything but upbeat and (2) unfortunately, the next visible support levels are the 200 DMA which is way down at ~6461 and the LOWER boundary of the short term uptrend at ~5886. Don’t even ask about the lower boundary of the S&P intermediate term uptrend. Do I need to say that I am still in my foxhole? Having said all that, I don’t believe this is anything more than a healthy much needed correction and I am making my list and checking it twice.

 

            Thursday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

            Goldman calls the bottom in software.

            https://www.zerohedge.com/markets/goldman-calls-bottom-historic-software-rout-heres-why

 

            But there are still areas of potential weakness.

            https://www.zerohedge.com/the-market-ear/deja-vu-getting-dangerous-nasdaq-replays-2025-breakdown

 

            The bottom in gold?

            https://www.zerohedge.com/the-market-ear/gold-cleans-out-excess-without-killing-trend

 

            A positive ‘January effect’ indicator.

                        https://www.marketwatch.com/story/this-powerful-economic-indicator-is-sending-a-clear-message-about-stocks-for-2026-202532f1?st=MMJJEs

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The December job openings report (JOLTS) showed 6.5 million vacancies versus forecasts of 7 million.

                          https://www.ft.com/content/378fb2e9-6575-4da2-9769-13cf6bc499ad

 

                        International

 

December Japanese household spending fell 2.9% versus expectations of -2.0%; the December preliminary leading economic indicators came in at 110.2 versus 110.3.

 

The December German trade balance was +E17.1 billion versus estimates of +E14.0 billion; December industrial production declined 1.9% versus +0.3%.

 

                        Other

 

                          Recent revisions render ADP’s private payroll report useless.

  https://wolfstreet.com/2026/02/04/adp-employment-report-massively-revised-back-to-2010-with-huge-erratic-differences-in-month-to-month-job-creation-losses/

 

                          January vehicle sales fall to three year low.

                          https://www.advisorperspectives.com/dshort/updates/2026/02/05/vehicle-sales-fall-to-3-year-low-in-january

 

                          Latest Q4 GDP nowcast.

                          https://www.capitalspectator.com/moderate-growth-still-expected-for-delayed-us-q4-gdp-report/

 

                          100 year look at marginal tax rates.

                          https://talkmarkets.com/content/how-low-are-taxes-today-a-100-year-look-at-us-tax-policy?post=555277

 

            Monetary Policy

 

              Eliminate the regional Fed walls.

              https://www.realclearmarkets.com/articles/2026/02/05/tear_down_the_regional_fed_walls_mr_warsh_1162754.html

 

Realigning Fed policy. (note that this article is by Peter Navarro, an ardent Trumpite and a leading contributor to the Trump tariff policies. He makes some good points about mistakes the Fed has made and how a different monetary policy could help the US economy. But the notions that [1] inflation ‘is’ declining {versus ‘has’ declined} and [2] tariffs have been a major positive are not exactly correct.)

              https://www.realclearmarkets.com/articles/2026/02/05/how_kevin_warsh_could_square_the_trumpnomics_circle_1162976.html

                       

            Fiscal Policy

           

              The $18 trillion ‘investment’ hoax.

              https://www.cato.org/blog/trumps-eighteen-trillion-dollar-hoax

 

            Tariffs

 

              Farm lobby sends damning letter to congress.

              https://mishtalk.com/economics/farm-lobby-sends-damning-letter-to-congress-about-trumps-tariffs/

 

              (Though its appears Trump has gotten the message.)

              https://www.zerohedge.com/markets/us-soy-surge-tests-brazils-supply-ceiling

 

              And manufacturers aren’t much happier.

                          https://www.wsj.com/economy/u-s-manufacturing-is-in-retreat-and-trumps-tariffs-arent-helping-d2af4316?amp%3Breflink=article_copyURL_share&st=4KNo4Z

 

 

            Kevin Warsh

 

              Citadel on Warsh.

              https://www.zerohedge.com/markets/broadly-good-dollar-citadels-macro-gurus-ultimate-guide-implications-fed-chair-warsh

 

     Investing

 

              Twelve ways politics have confounded investors.

              https://www.carsongroup.com/insights/blog/12-ways-politics-has-confounded-and-confused-investors/

 

              What we do when stock prices go up (a lot).

              https://behaviouralinvestment.com/2026/02/04/what-we-do-when-things-go-up-a-lot/

 

              Dispersion in the credit markets.

              https://www.advisorperspectives.com/commentaries/2026/02/05/dispersion

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---It's the money supply, stupid

 

The Morning Call

 

2/5/24

 

The Market

         

    Technical

 

            Wednesday in the charts.

            https://www.zerohedge.com/markets/vicious-moves-momo-meltdown-saaspocalypse-spreads-crude-jumps-crypto-dumps-dollar-pumps

 

Note: the S&P was lower again yesterday, closing right on its 50 DMA. It has bounced off that level twice in the recent past---a good sign that it could do it again. If not, the 100 DMA (~6794) is the next visible support level. Complicating the technical picture is the Dow’s performance as well as overall better breadth than the S&P’s pin action would suggest. Indeed, our portfolios, which are value based, had a very good day yesterday. So, my bottom line hasn’t changed---there are too many cross currents to come out of my foxhole. Patience and follow through.

 

 

            Wednesday in the technical stats.

https://www.barchart.com/stocks/momentum  (notice the difference in breadth between the NYSE and the NASDAQ).

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

 

            Tech cracks, stress explodes.

            https://www.zerohedge.com/the-market-ear/tech-cracks-stress-explodes-software-may-be-hitting-exhaustion

 

            Bulls getting shocked.

            Too Many Bulls Getting Shocked As AI Turns On Humans

 

            The latest from Morgan Stanley’s desk.

            https://www.zerohedge.com/markets/morgan-stanley-quants-warn-10-billion-forced-systematic-selling-retail-buyers-absent

 

 

    Fundamental

 

      Headlines

 

              The Economy

 

                        US

 

Weekly initial jobless claims totaled 231,000 versus predictions of 214,000.

                                                  https://www.zerohedge.com/personal-finance/initial-jobless-claims-unexpectedly-jumped-last-week-ytd-job-cuts-hit-highest-2009

 

The January services PMI was 52.7 versus estimates of 52.5; the January composite PMI was 53.0 versus 52.8.

 

The January ISM services index was 53.8 versus projections of 54.3.

                          https://talkmarkets.com/content/january-adp-private-employment-and-ism-services-reports-show-increasing-stagflation?post=555033

 

                        International

 

December German factory orders were up 7.5% versus consensus of -4.2%.

 

                          December EU retail sales fell 0.5% versus expectations of +0.2%.

 

The January EU construction PMI was 45.3 versus forecasts of 48.0; the January German construction PMI was 44.7 versus 50.5; the January UK construction PMI was 46.4 versus 42.5.

 

                        Other

 

                          December median household income.

                          https://politicalcalculations.blogspot.com/2026/02/median-household-income-in-december-2025.html

 

                          More tough times for agriculture.

                          https://econbrowser.com/archives/2026/02/more-tough-times-for-us-agriculture

 

Commercial mortgage backed securities delinquency rate spikes to record high.

https://wolfstreet.com/2026/02/03/office-cmbs-delinquency-rate-spikes-to-record-12-3-much-worse-than-financial-crisis-meltdown-peak/

 

            Monetary Policy

 

              It’s money supply, stupid.

              https://scottsumner.substack.com/p/simplify-simplify-simplify

 

              BOE and ECB leave rates unchanged.

              https://www.zerohedge.com/markets/eur-flat-ecb-leaves-rates-unch-cable-drops-boes-dovish-hold

 

            Fiscal Policy

 

              Will republicans fall for inflationary populism?

              https://thedailyeconomy.org/article/will-republicans-fall-for-inflationary-populism/

 

            Inflation

 

              Will the sugar high from tax refunds stoke inflation?

              https://mishtalk.com/economics/will-a-sugar-high-of-huge-tax-refunds-in-april-stoke-inflation/

 

            Tariffs

 

              When tariffs hit home.

              https://talkmarkets.com/content/when-tariffs-hit-home?post=555017

 

            The Financial System

 

              The Treasury market is in dangerous territory.

              https://www.ft.com/content/c1229d2e-b871-4419-b9ed-7a9589c5a296

 

     Investing

 

            Market cycles potentially driving 2026 returns.

            https://www.advisorperspectives.com/commentaries/2026/02/04/market-cycles-driving-2026-returns

 

            Wall Street’s rotation into value carries a dot.com warning.

            https://www.bloomberg.com/news/articles/2026-02-04/wall-street-s-rotation-into-value-has-a-dot-com-warning-to-it?sref=loFkkPMQ

 

            Gold bulls crawl out of the bunker.

            https://www.zerohedge.com/the-market-ear/few-old-gold-bulls-crawl-back-out-bunker

 

            Nuclear nuggets.

            https://www.zerohedge.com/commodities/nuclear-nuggets-goldman-offers-snapshot-reactor-space-uranium-prices-cameco

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

 

 

 

The Morning Call---I give up.

 

The Morning Call

 

2/4/26

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/markets/tech-wrecks-crypto-crashes-bullion-bond-yields-bounce

 

Note: how often do I note ‘follow through’? Yesterday’s pin action put a cloud over the S&P’s slightly positive performance last week. The bad news is that it closed below the ever present former all-time high; the good news is that it bounced off its 50 DMA. Bottom line, with all the back and forth around that former all-time high, I am going to give up trying to call a breakout or a failed breakout. Buyers and sellers are in a pitched battle. I am in my foxhole until it’s over. As always, follow through.

 

            Tuesday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/sectors/rankings

            https://www.barchart.com/stocks/signals/new-recommendations

           

            As goes January, so goes the year.

            https://www.carsongroup.com/insights/blog/so-goes-january-so-goes-the-year/

 

            In the meantime, downside convexity builds.

            https://www.zerohedge.com/the-market-ear/software-cracks-credit-blinks-spx-still-pretends-downside-convexity-builds

 

            Why do equities tend to correct in February?

            https://www.zerohedge.com/markets/why-does-equity-market-tend-correct-february

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 8.9% while purchase applications were down 14.0%.

 

The January ADP private payrolls report showed job increases of 22,000 versus expectations of 35,000.

 

The February economic optimism index was reported at 48.8 versus forecasts of 47.0.

 

                        International

 

January EU flash CPI came in at -0.5% versus projections of -0.4%; January PPI was down 0.3% versus +0.2%.

 

The January Japanese services PMI was 53.7 versus estimates of 53.4; the composite PMI was 53.1 versus 52.8; the January Chinese services PMI was 52.3 versus 51.5; the composite PMI was 51.5 versus 50.9; the January German services PMI was 52.4 versus 53.2; the composite PMI was 52.1 versus 52.5; the January EU services PMI was 51.6 versus 51.9; the composite PMI was 51.3 versus 51.5; the January UK services PMI was 53.7 versus 53.9; the composite PMI was 54.0 versus 54.3.

 

                        Other

 

                          Update on the state of freight.

                          https://bonddad.blogspot.com/2026/02/the-state-of-freight-is-mainly.html

 

                          The consumer sentiment puzzle.

                          https://www.ft.com/content/f3edc83f-1fd0-4d65-b773-89bec9043987

                       

            Fiscal Policy

 

              On the national debt, the left and right have become one.

              https://www.realclearmarkets.com/articles/2026/02/03/on_the_national_debt_left_and_right_have_become_one_1162306.html

 

              Crony socialism.

              https://www.wsj.com/opinion/usa-rare-earth-commerce-department-trump-administration-china-cd010507?mod=opinion_lead_pos3

 

            Kevin Warsh

 

              What Warsh learned from Druckenmiller.

                          https://www.wsj.com/economy/central-banking/what-kevin-warsh-learned-working-for-stanley-druckenmiller-7fc07efe?mod=economy_lead_pos2

 

 

              Will Warsh fix the Fed?

              https://www.advisorperspectives.com/commentaries/2026/02/03/will-kevin-warsh-fix-fed

 

     Investing

 

            What is your risk tolerance?

            https://alhambrapartners.com/weekly-market-pulse-whats-your-risk-tolerance/?src=news

 

            Why the selloff in gold likely isn’t over.

                        https://www.marketwatch.com/story/heres-the-real-reason-gold-prices-plunged-and-why-the-selloff-likely-isnt-over-yet-d6141fd1?st=NieUVE

 

            January dividends by the numbers.

            https://politicalcalculations.blogspot.com/2026/02/dividends-by-numbers-in-january-2026.html

 

            Update on valuations.

            https://www.advisorperspectives.com/dshort/updates/2026/02/03/market-valuation-is-the-market-still-overvalued

 

            A warning to gold investors.

            https://www.zerohedge.com/precious-metals/gold-investors-remember-1933

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.