The Averages (22327, 2626) rallied yesterday, but still finished in short term downtrends whose boundaries are ~17304/2231 on the downside and ~22917/2717 on the upside.
Very short term, the huge buyside orders in the quarter end institutional rebalancing process continue to influence trading.
Quarter end rebalancing.
On a slightly longer term basis, I still think the evidence points to more downside: (1) stocks condition has largely been worked off, (2) the VIX is not reflecting a reduction in risk adverseness among investors, (3) both indices experienced gap up opens last Tuesday [which need to be filled] and (4) some of the most powerful rallies occur during bear markets. There is almost no visible support until ~ 15399/1810.
And. The unprecedented drop in autocorrelation.
A short history of dead cat bounces.
TLT, GLD and UUP had a quiet day on low volume with no change to their technical picture.
Monday in the charts.
Yesterday was another day of mixed US data. February pending home sales were better than anticipated while the March Dallas Fed manufacturing index was awful.
Overseas, the numbers were better than expected. March EU economic sentiment, industrial sentiment and services sentiment were above estimates while March EU consumer confidence and March German CPI were in line and EU business confidence came in below forecasts.
We need more testing.
Grounds for optimism.
Keeping perspective on scientific claims.
Sweden’s approach---do nothing.
The Fed and the damage it has done:
Jim Grant warns Fed actions are a clear and present danger (must read):
Multi trillion dollar helicopter credit drop.
Bottom line: the above interview with Jim Grant captures all my worries about what is in my opinion the biggest problem facing the Market. There are insolvencies ahead that the Market likely hasn’t discounted.
Projected S&P quarterly dividends.
Where ‘I bought it for the dividend’ went wrong.
News on Stocks in Our Portfolios
This Week’s Data
February pending home sales rose 2.4% versus expectations of -1.0%.
The March Dallas Fed manufacturing index came in at -70 versus estimates of -6.
Month to date retail chain store sales grew at a slower rate than in the prior week.
The January Case Shiller home price index was flat versus projections of up 0.2%.
February Japanese unemployment was 2.4%, in line; retail sales were +0.6% versus -0.9%; industrial production was up 0.4% versus up 0.1%; construction orders were up 0.7% versus -12.0%; housing starts were -12.3% versus -14.7%
The March Chinese manufacturing PMI came in at 52 versus expectations of 45; the nonmanufacturing PMI was 52.3 versus 40.4.
The March German unemployment rates was 5.0% versus estimates of 5.1%.
March EU CPI was +0.5%, in line.
Q4 UK GDP was flat, in line; business investment was -0.5% versus -1.0%; the trade deficit was L5.6 billion versus L7.0 billion.
Oil man’s plea to Trump.
What I am reading today
An American approach to the coronavirus crisis.
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