The Market
Technical
The
indices (DJIA 13583, S&P 1455) drifted down yesterday, but remained well
within their primary trends: (1) short term uptrends [13314-14145, 1429-1521]
and (2) intermediate term uptrends [12488-17468, 1318-1916]. Additional (1) resistance exists at
14190/1576 and minor resistance at 13653/1469 and (2) support at 13302/1422 and
minor support at 1442.
As
is usual on Columbus Day, volume was almost nonexistent. Breadth was lousy. The VIX rose, finishing in the zone between
the upper boundary of its short term downtrend and the lower boundary of its
intermediate term trading range.
GLD
fell, closing below the lower boundary of its very short term uptrend. Our time and distance discipline now kicks
in; however, because the boundary is one of a very short term trend, the time
element consists of only two to three days.
GLD remains well above the lower boundaries of its short term uptrend
and its intermediate term trading range.
Below is a must read:
Bottom
line: the primary price trends continue to the upside. With forward earnings guidance from
management headed down, this positive momentum will likely get a test over the
next couple of weeks as earnings season starts.
Of course, if investors continue to interpret bad news as good news as
they have recently, then sloppy profit reports may have no impact at all.
The internal
Market structure continues to make me uneasy, I am not chasing stock prices
up. Indeed, I am playing very close
attention to our Sell Discipline.
Here
is some analysis of the advance/decline line (medium):
Fundamental
Headlines
As
you know, the banks and the government took Monday off; so there was very
little news. Most of the air time
yesterday was dedicated to anticipating the upcoming earnings season which
starts today after the bell.
The
only other items that bear mentioning are (1) the World Bank lowered global
growth---of course, these guys have never been right; so this is almost not
worth mentioning and (2) a report out of Europe that
Draghi’s new bail out fund is now open for business. His problem, of course, is that no one wants
to ask for a bail out.
The
latest from Spain
Dutch
companies plan for Greek exit of EU (medium):
Bottom
line: stocks are overvalued (as measured by our Model); and save for the
potential of a Romney victory in November which could lead to more responsible
fiscal, monetary and regulatory policies, I see nothing else that could take
equity prices higher. In fact, the US
How
reliable is the Halloween indicator (medium):
A
look ahead as this week kicks off earnings season (medium):
Investors
appear to be assuming that there will be no ‘fiscal cliff’ (medium):
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