The Morning Call
The Market
Technical
The
indices (DJIA 13971, S&P 1517) treaded water yesterday. Both of the Averages finished (1) below, but
very close to, the upper boundary of their short term uptrends [13341-13992,
1451-1520] and (2) within their intermediate term uptrends [13327-18327,
1408-2003].
Volume
fell; breadth was poor. The VIX declined
but remained within its intermediate term downtrend.
GLD
was down big. That move broke the lower
boundary of its very short term uptrend which is also the lower boundary of a
pennant formation. I have noted
previously that a break of either boundary of that pattern would likely
determine price direction over the short term.
Our time and distance discipline is now operative; but for a short term
formation, the time element is only a couple of days. So a close below the lower boundary of the
very short term uptrend will be confirmed at the end of this trading day. Clearly, that would not be good technically for GLD.
Ron
Paul on gold (medium):
Bottom line: the
Averages continued to bang against the upper boundaries of their short term
uptrends---which have to date acted as a governor on the rate of the Market’s
advance. On the other hand, (1) the
indices haven’t bounced off of those resistance points to any meaningful
extent, indicating a firm bid remains under the Market and (2) the S&P has
traded above the upper boundary of that tight two week trading range.
That suggests to
me that 14140/1576 is still a reasonable objective though it may take some time
to get there. In the meantime, our
Portfolios will continue to chip away as prices advance.
Insider
sales are soaring (medium):
Fundamental
Headlines
No
economic news yesterday. The news flow
focused on three much discussed issues of late:
(1)
a potential currency war. The G20 meets at the end of this week and
currency issues appear to be the lead item on the agenda.
http://www.zerohedge.com/news/2013-02-11/getting-richer-getting-poorer-japans-fx-bond-stock-trilemma
(2)
problems in Europe .
Update on Spain
And Italy
(3)
the fast approaching sequester ‘effective date’. Obama gives His state of the union
tonight. Rumors are the He will propose
new programs for government spending. So
nothing new on the dem side. As for the GOP,
it is remaining adamant that in the absence of targeted spending cuts equaling
the sequestration amount [and no additional tax cuts], the sequester will go
through. I believe that it is imperative
that they hang tough.
Bottom
line: March 1 (the effective date of the
sequester) draws ever closer and neither the dems nor the GOP appear close to
yielding on their respective positions.
I am sticking with my line in the sand thesis. Further, I remain
encouraged by the latest GDP report that
lower government spending does not mean disaster for the other sectors of the
economy. Hence, I am hoping that the
sequester happens.
What I am not
sure of, is how the Markets will react.
I don’t have to reiterate that I think that the sequester will be a
positive for stocks long term. Short
term, who knows; but if stocks suffer some severe whackage as a result, the our
Portfolios will likely put some cash back in the Market.
Conditions in Europe
are not getting any better; and if there are any fireworks at the G20 meeting
over (Japanese) currency policy, it may not be well received in the bond pits.
Have
the bond vigilantes been replaced by brent vigilantes? (medium):
How
sovereign defaults happen (medium):
The
latest from John Hussman (medium):
Investing for Survival
Continued
currency debasement (long, but a must read):
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