The Morning Call
5/11/15
The Market
Technical
Monday Morning Chartology
You
can see the battle going on around the trend in lower highs. Friday, the S&P closed back above this
trend line for the third time. Will that
be the charm and stocks follow through to the upside? I have no idea. I do know that Friday’s explosive pin action
occurred on unimpressive volume. I
believe that if there is follow through, the upper boundary of the Average’s
long term uptrend (2132) poses formidable resistance.
TLT
was up on Friday; but remained well within a short term downtrend, below its
100 day moving average and the former lower boundary of its intermediate term
uptrend. Clearly, the bond guys were not
nearly as impressed by the Friday’s nonfarm payrolls number as the stock guys.
GLD
is suggesting that inflation has nothing to do with last week’s bond market
demise. It remains below its 100 day
moving average and continues to build a head and shoulders formation.
The
VIX dropped 15% of Friday, taking it back below its 100 day moving average (a
plus), below the upper boundary of a very short term downtrend (a plus) and
within a short term trading range. As it
approaches the lower boundary of the short term trading range, the more
attractive it becomes as portfolio insurance.
Fundamental
Latest
on Greek/Troika talks (medium):
Merkel
under pressure to let Greece default (medium):
IMF
preparing for Grexit (medium):
***overnight,
China cut interest rates for the third time in six months.
Investing
for Survival
12
things I learned from Morgan Housel: Part 4
4. “[Investing] is just buying and waiting.”
It is
hard for some people to understand the difference between 1) waiting and 2)
predicting. Fundamentally, the difference between waiting and predicting
is the difference between focusing on what to buy by finding an asset selling
at a discount to value right *now* versus trying to guess about *when*
in the future the value might rise. Price is not the same thing as value. Price
is what you pay for an asset and value is what you get in buying an asset. Only
rarely doe price equal value. James Montier adds: “We need to stop pretending
that we can divine the future, and instead concentrate on understanding the
present, and preparing for the unknown.” We have lots of information about the
present and exactly zero information about the future. To work hard to
understand the present moment in time is not to think you can predict when something will happen in the future.
You may be working from an assumption that sometime over a ten year period Mr.
Market will raise price of as asset so it is equal to or greater than value.
But it is a fool’s errand to try to predict precisely when it will happen.
When it happens, it happens. You will “know it when you see it” if you
understand value.
News on Stocks in Our Portfolios
Economics
This Week’s Data
Other
Update
on big four economic indicators:
More
on student debt (medium):
Thoughts
on last week’s ‘goldilocks’ employment number (medium):
And (medium):
Politics
Domestic
Your
tax dollars at work (short):
National pride
or the lack thereof (short):
International War Against Radical Islam
Bin
Laden’s death. What really happened
(long but a must read):
Saudi strike force on Yemen border
(short):
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