The Morning Call
11/2/15
The
Market
Technical
Monday
Morning Chartology
The
S&P continued to surge last week, pushing above its 200 day moving average,
reverting from resistance to support and its short term downtrend, re-setting
to a trading range. It sure looks like
it has its all-time high and the upper boundary of its long term uptrend in its
sights.
Regression
to trend (short and a must read):
The
long Treasury remains within multiple trading ranges and continues to develop a
pennant formation---but doesn’t show that bond investors have much confidence
in a December Fed rate hike.
Gold
is now challenging its 100 day moving average to the downside; though it remains
in a short term uptrend. It continues to
struggle to mark a bottom.
The dollar is challenging
the upper boundary of its very short term downtrend, reflecting that somebody
is willing to bet on a December rate hike.
The
VIX clearly supports the rise in the S&P.
However, the 12-13 area still represents an attractive price for
portfolio insurance.
Fundamental
Last
week’s data returned to its negative trend (nine of the last ten weeks): above
estimates: month to date retail sales, the October Richmond Fed manufacturing
index, the September US trade balance, the October Chicago PMI and weekly
jobless claims: below estimates: new home sales, the October Dallas Fed
manufacturing index, September durable goods orders, the October Markit
services flash PMI, October consumer confidence, weekly mortgage and purchase applications,
September pending home sales, September personal income and spending, October
consumer sentiment and third quarter GDP.
Unfortunately, not only was the aggregate data negative, the primary
indicators were all disappointing (new home sales, durable goods orders,
personal income and spending and third quarter GDP).
Counterpoint:
Yet
somehow the Fed missed all of this and altered the tone of its statement from
its meeting to more hawkish, reinforcing the notion that the FOMC meetings are
just a giant circle jerk. Whatever these
guys (and gal) think that they are accomplishing, I don’t believe that their objectives
will be met and that ultimately history will not be kind to them.
Overseas,
the data was sparse but it was balanced.
Update
on the Buffett indicator (medium):
Economics
This Week’s Data
Other
Mohamed
El Erian on the FOMC meeting (medium):
Goldman:
the ECB’s monetary policy hasn’t worked (medium):
Politics
Domestic
International War Against Radical
Islam
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