The Morning Call--Monday Morning Chartology

The Morning Call

10/29/12

The Market

           

    Technical

      Monday Morning Chartology

             The S&P confirmed the break of the triple support zone (short term uptrend [brown lines], 50 day moving average [wiggly red line] and 1422 support).  Under our technical system, it must now set a trading range; and 1395 looks the most likely candidate.  However, that is a minor support level and the S&P may have to drop to the lower boundary of its intermediate term uptrend (purple lines) before it can stabilize.

            GLD broke through the lower boundary of its very short term uptrend.  Then broke through its interim support level.  It may try to stabilize but there is no visible support above the lower boundary of its short term uptrend (brown line).  In the meantime, it is developing a very short term downtrend.

             The VIX spiked last week and may be preparing an assault on the upper boundary of its short term downtrend.  It has traded through both its 50 day moving average (wiggly red line) and 200 day moving average; so it is carrying some momentum into that potential challenge.  The indicator is now neutral to negative; a break above the upper boundary of the short term downtrend would be very negative.

            Update on ‘the best stock market indicator ever’:

            http://advisorperspectives.com/dshort/guest/John-Carlucci-Best-Indicator-Ever-Update.php

    Fundamental

    

            The pain in Spain will not wane (medium):

            http://www.bloomberg.com/news/2012-10-29/spain-s-pain-seen-intensifying-as-slump-deepens-plight.html

            For those of you who think that you  are hiding in bonds (short):

            http://www.thereformedbroker.com/2012/10/26/33-times-you-poor-dumb-bastards/

            An early sign of trouble in bond land? (short):

            http://www.zerohedge.com/news/2012-10-26/what-do-high-yield-bonds-know-no-one-else-does

            The latest from Barry Ritholtz (short):

            http://www.ritholtz.com/blog/2012/10/reduce-equity-exposure/

            The immorality of QEIII (medium):

            http://www.zerohedge.com/news/2012-10-28/fullness-and-boldness-qes-manipulation-americans-behavior

      News on Stocks in Our Portfolios

 

Economics

   This Week’s Data

            September personal income rose 0.4% in line with expectations; personal spending increased 0.8% versus estimates of +0.6%; the PCE price index came in at +0.1% as anticipated.

   Other

            The new debt to GDP ratio (short):

            http://www.zerohedge.com/news/2012-10-26/september-30-2012-us-debt-gdp-1024

Politics

  Domestic

The truth about outsourcing (4 minute video):

http://www.clubforgrowth.org/perm/?postID=15979

  International

            Europe is looking more like Japan (medium):

            http://www.telegraph.co.uk/finance/financialcrisis/9634326/Eurozone-nears-Japan-style-trap-as-money-and-credit-contract-again.html

            Israel strikes Sudan missile factory (medium):

            http://www.zerohedge.com/news/2012-10-28/israel-conducts-air-strike-sudan-missile-base-dry-run-iran-attack