The Morning Call
The Market
Technical
The
indices (DJIA 14756, S&P 1574) bounced back yesterday. The Dow traded once again above the upper
boundary of its short term uptrend (14044-14739) but remains within its
intermediate term uptrend (13723-18723) and long term uptrend (4783-17500).
The
S&P closed within all major uptrends: short term ( 1537-1611), intermediate
term (1459-2048) and long term (688-1750).
Despite a mighty rebound, it did not recover above its prior all time
high (1576).
Volume
declined: breadth bounced strongly. The VIX fell, finishing within its short
and intermediate term downtrends.
GLD
rose but remained well below the lower boundaries of its short term downtrend
and its intermediate term trading range.
In addition, it closed near the lower boundary of its long term
uptrend. Monday’s low will likely be
retested near term; and if it holds, our Portfolios will likely begin
rebuilding a position.
And:
The support price for
gold (medium):
Bottom line: given the Market’s oversold condition at the
close Monday, it is not surprising to see a rebound. However, I was impressed by its strength and
it bears witness that the bulls are alive and well. With both of the Averages remaining within
all major uptrends, there is no point to being bearish near term. However, any further advance will prompt
sales in any stock trading above the lower boundary of its Sell
Half Range
The Market at a critical
juncture (short):
Fundamental
Headlines
Yesterday’s
economic data was largely upbeat: March CPI ,
housing starts and industrial production all came in better than anticipated
though building permits and weekly retail sales were a bit disappointing. Nothing here that threatens our forecast.
More
from Lance Roberts (medium and a must read):
Update
on the big four economic indicators (medium):
The
data out of Europe was mixed (good stats out of the EU
and UK , poor
data from Germany )
which on a relative basis, many view as a positive. The Market seems to have agreed as all these
numbers got the trading off to a good start.
The
other mentionable item was the comments by several regional Fed chiefs again
hinting at Fed tightening. Clearly,
investors ignored/didn’t believe any of this which keeps alive my complete
confusion about what is going on.
Bottom
line: the US
economy continues to be the bright spot in our outlook. Europe has faded as a
headline though I continue to believe that it is only a matter of time before
someone over there steps on his own d**k and the scata hits the fan again.
I have no idea what is happening in monetary
policy. FOMC members keep dancing around
the possibility that QEinfinity could be coming to an end; and except for one
negative Market session a couple of weeks ago, it seems that investors don’t
believe it. Maybe these Fed officials
are just trying to talk the talk and investors know that they won’t walk the
walk. I can understand investors
disbelief; but completely ignoring the aforementioned comments with stocks at/near
record highs seems a bit too blasé to me.
I
remain quite happy with our cash position.
The
latest from Lance Roberts (medium):
Five
warning signs (medium):
The
latest from Mohamed El Erian (21 minute video but a must watch):
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