Monday, September 21, 2015

Monday Morning Chartology

The Morning Call

9/21/15

The Market
         
    Technical

            The S&P made a valiant challenge of its 1970 level but failed on Friday.  It also closed below the lower boundary of the rising trend of higher lows; a finish below that level today will void the trend.  The next support would be the lower boundary of its intermediate term uptrend (1914).  The resistance levels of the 100 day moving average and the short term downtrend remain intact.



            After seemingly discounting a Fed rate hike (lower bond prices) since mid-August, the long Treasury rallied on Friday, following the no-hike.  If the economy continues to weaken and the Fed stands pat, bond prices should continue to advance.  On Friday after challenging its 100 day moving average, TLT closed above it, leaving it as support.  It remained within short and intermediate term trading ranges.



            GLD bounced nicely last week and is now approaching the resistance levels of the upper boundary of its short term downtrend and its 100 day moving average.  There is no reason to believe that those will be successfully challenged; but you never know.



            The VIX challenged the lower boundary of its short term uptrend on Thursday than bounced hard on Friday.  It remains above its 100 day moving average and within an intermediate term trading range.



    Fundamental

       Headlines

            Last week’s US economic data was disappointing for the fourth week in a row: above estimates: month to date retail chain store sales; below estimates: weekly jobless claims, the Philadelphia and NY Fed manufacturing indices, August leading economic indicators, August industrial production and weekly mortgage and purchase applications: in line with estimates: August housing starts and building permits, August retail sales, July business sales and inventories. 

            The primary indicators included August leading economic indicators (-), August industrial production (-), August housing starts (0) and August retail sales (0)---so discouraging results there also.  These trends are getting worrisome.

            Unless you were in outer space, you know that the Fed left rates unchanged---as they should have.  The ‘but’ here is that it should have raised them long ago.  Whether Friday’s sell off was just the ‘sell the news’ part of ‘buy the rumor, sell the news’ or that investors are realizing that the Fed has lost control, remains to be seen.  I know that I have been predicting this loss of faith for some time; and while it seems to have been occurring at times, at others not so much.  How well the lower boundary of the indices’ intermediate term trends do in providing support will likely tell us if I am right.

    
Economics

   This Week’s Data

   Other

Politics

  Domestic

  International War Against Radical Islam







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