The Morning Call
The Market
Technical
The
indices (DJIA 15392, S&P 1744) turned in a mixed performance yesterday (Dow
down, S&P up fractionally). The Dow
remains within its short term trading range (14190-15550), while the S&P is
in a short term uptrend (1685-1839).
They continue out of sync short term.
Both
of the Averages are within their intermediate term uptrends (15080-20080,
1604-2190) and long term uptrends (4918-17000, 715-1800).
Volume
was pathetic; breadth mixed. The VIX
rose, closing within its short term trading range and intermediate term
downtrend.
The
long Treasury was off a bit, finishing within its short term trading range and
its intermediate term downtrend.
GLD
inched higher, continuing to toy with the upper boundary of its very short term
downtrend. However, it has yet to
violate that boundary or the upper boundaries of its short term and
intermediate term downtrends.
Bottom
line: the S&P crept to a new high
yesterday, though the Dow is lagging and is out of sync.
We are very close to the beginning of the
best months of the year (November to April) performance-wise. Plus the Holidays tend to boost everyone’s
sentiment. If the Dow can make a new
high and re-set with the S&P, then traders may want to play the
November/December period to the upside.
Though I would caution that (1) the last time they made new highs, it
was a three day affair, so be careful not to jump the gun and (2) another
fiscal fist fight is scheduled at the first of the year. and (3) stocks
are very overbought right now---so some weakness is to be expected short term
Nonetheless, if
equities move up in price and any of our stocks trade into their Sell
Half Range
Time
for a Market pause (medium):
Fundamental
Headlines
One
datapoint yesterday: September existing home sales fell but less than
expected. Not much of value there.
The
rest of day was spent in a sort of quiet limbo as investors digested earnings
reports and awaited today’s nonfarm payroll number (that was due last
Thursday).
Bottom line:
equities, in my opinion, remain overvalued based on expectations for continuing
slow economic growth, a burdensome fiscal policy and QE Infinity which, while
it may keep the musical chairs game going a bit longer, will probably end very
ugly. Granted we are closing in on a
period that historically has been the Market’s most buoyant; and that might
provide a trading opportunity for the very brave at heart who maintain very
tight stops.
The most
important information on which I wait are the signs of how the last three weeks
have impacted business and consumer confidence.
The
latest from John Hussman (medium):
Jack
Bogle on efficient markets (medium):
Margin
debt hits a new high (short):
Near
term Market risks (medium):
QEInfinity’s
misallocation of capital (short):
More
on valuation (medium):
The
latest from Stephen Roach (medium):
Debts,
deficits and economic growth (medium and today’s must read):
How
to profit from Washington ’s
bickering (medium):
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