The Morning Call
5/26/15
The
Market
Technical
Tuesday Morning Chartology
The
S&P is in uptrends across all timeframes even the very short term and
remains well above its 100 day moving average.
The only negative from a technical standpoint is that it has not shown
much follow through after trading above its former all-time high. It is only 12 points from the upper boundary
of its long term uptrend which, it seems to me, it will inevitably
challenge. However, I continue to
believe that challenge will not be successful in any meaningful way.
A
minor rally last week notwithstanding, the momentum remains to the downside in
TLT, apparently the result of the bond guys seeing a rate hike sooner than the
stock guys.
GLD
retreated last week back below its 100 day moving average and the neckline of
the head and shoulders pattern. The best
thing we can say is that it isn’t going down, at least, on a short term and
intermediate term basis.
The
VIX closed the week below its 100 day moving average and below the upper boundary
of its very short term downtrend. It is
drawing neared to the lower boundaries of its short and long term trading
ranges, suggesting its value as portfolio insurance continues to rise.
Fundamental
The latest from Greece (short):
Anti-austerity parties win in Spanish
elections (medium):
Investing for Survival
12
things I learned from Morgan Housel: Part 11
11.
“Daniel Kahneman’s book Thinking Fast and Slow begins,
‘The premise of this book is that it is easier to recognize other people’s
mistakes than your own.’ This should be every market commentator’s motto.”
It is an
unfortunately aspect of human nature that we do not have perspective on
ourselves. Humans have developed a series of heuristics that make it hard for
us, especially in a modern world, to see our own mistakes. If you have an
interest in exploring this topic, Daniel Kahneman explains why this is true in this excerpt from his book:
“I’m better at detecting other people’s mistakes than my
own…. When you are making important decisions and you want to get it right, you
should get the help of your friends. And you should get the help of a friend
who doesn’t take you too seriously, since they’re not too impressed by your
biases.”
Having a
posse of people around you who are afraid to tell you that the emperor has no
clothes is not helpful in overcoming this bias. Morgan Housel cites Charlie Munger’s wisdom on this problem: “Only in fairy tales are
emperors told they’re naked.” Pavlovian
association and other heuristics Morgan has
written about acting together in
the form of a lollapalooza make things worse.
News on Stocks in Our Portfolios
Economics
This Week’s Data
April
durable goods fell 0.5% versus expectations of down 0.6%; ex transportation,
they rose 0.5% versus estimates of +0.4%.
Other
How
the Fed depressed the recovery (short):
Politics
Domestic
International
In
case you weren’t aware (medium):
Propaganda
but something to think about (medium):
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