The Morning Call
The Market
Technical
The
indices (DJIA 14035, S&P 1530) had another great day, finishing (1) right
on the upper boundaries of their short term uptrends [13409-14059, 1460-1529]
and (2) within their intermediate term uptrends [13370-18370, 1415-2010].
Volume
fell but breadth was very strong. The
VIX declined, remaining within its intermediate term downtrend.
GLD
dropped again, closing within its short term downtrend and its intermediate
term trading range.
Bottom line: ‘the technical story remains
unchanged---(1) the Averages tracking the upper boundary of their respective
short term uptrend, (2) 14140/1576 continues to be a reasonable technical price
objective and (3) our Portfolios will continue to Sell as prices advance.’
S&P
performance before and after a seven week winning streak (short):
Visualizing
Bob Farrell’s ten investing rules (medium and today’s must read):
Fundamental
Headlines
No
US
The
G20 agreement (medium):
And
has even more problems (medium):
Italian
loans plunge (medium):
http://www.zerohedge.com/news/2013-02-19/italian-bank-loans-plunge-record-leaders-say-no-cause-alarm
Meanwhile,
in Athens
***overnight,
the French and Swiss consumer sentiment reports were well above expectations
(hopium) while Italian industrial production plunged (reality).
Meanwhile,
Obama has started His drive to the sequestration hoop, masterfully ignoring His
own role in this measure and laying the blame for the horrendous burdens of
sequestration on the GOP’s doorstep.
Once again, I can’t get at the math.
Remember the sequestration is a reduction in the rate of spending. In other words, spending is going up, just
not as fast as Obama wants. It would be
enlightening for Him to explain how more spending results in all those job
loses, school closings, airport shutdowns, etc.
(BS meter now in the red zone).
Bottom
line: I have yet to see a valuation
study that has stocks undervalued. Nor
is there anything in the economic numbers to suggest that condition could change
anytime soon. Certainly, the Fed has its d**k in a wringer doubling down on a
monetary policy that will ultimately lead to either recession or much higher
inflation.
True, if
(operative word) sequestration occurs and if (operative word) additional spending
cuts are made that will lead to a decline in the debt to GDP
and government spending to GDP ratios, then
I can see a return to a more normal (higher) economic growth rate two to four
years from now.
But much can
slip between the cup and the lip; so I am not comfortable making a 24 to 48
month bet today especially when the bet hinges on our ruling class doing the
right thing. I continue to believe that
it is smarter to forego the existing opportunity cost of not being fully
invested in a euphoric Market in exchange for protecting principal when this moon
shot comes to a screeching halt.
The
latest from John Hussman (medium):
Coming
to a broker near you (short):
Subscriber Alert
At
the Market open this morning, small portions of the following holdings will be
Sold:
In
the High Yield Portfolio: VFC Corp
In
the Dividend Growth Portfolio: General Mills, Hormel, Nucor
In
the Aggressive Growth Portfolio: Medivation
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