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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