The Morning Call
1/4/16
The
Market
Technical
Monday Morning Chartology
The
S&P made its first higher high last week---the first one in over two months
(however, the Dow couldn’t). But it wasn’t
even able to hold above that very short term downtrend. Plus the 100 day moving average is clearly
moving lower. From a longer term perspective
notice the symmetry of how the S&P’s last year’s price action made new
higher highs, then a double top, then a series of lower highs---a classic
topping formation. Not that stocks are
making a top, but odds are going up.
The
long Treasury just can’t make new highs and its 100 day moving average is
starting to roll over. Certainly not
indicative of the bond guys thinking about a recession or a flight to safety.
This
is still the ugliest chart in the land.
Notice
that the VIX has bounced off the very short term uptrend several times and that
the 100 day moving average is climbing---not the best short term sign for stock
prices.
Fundamental
Last
week’s economic data was mixed, though the most important stat, the Chicago PMI
was a big negative. Nonetheless, I will
leave it as a draw, meaning that fourteen out of the last eighteen weeks have
been economically disappointing.
However, those four weeks have occurred in the more recent past; so the
hope that the economy has stabilized at a lower rate of growth remains alive
and well.
***overnight:
(1)
China’s December manufacturing PMI closed below 50
[negative growth], the yuan declined and stock trading was halted after circuit
breakers were tripped; the UK reported a weak PMI number; however, the Eurozone’s
PMI’s both collectively and individually were up,
(2)
Saudi Arabia executed a Shi’a cleric and cut diplomatic
relations with Iran; Iranian protestors storm and burn Saudi embassy.
Update
on valuation: regression to trend (short and a must read):
The
latest from JP Morgan (medium and a must read):
Update
on the municipal debt problem (medium):
The
latest from Nassim Taleb (medium and a must read):
Investing for Survival
Risks
that can devastate your retirement:
News on Stocks in Our Portfolios
Economics
This Week’s Data
Other
Politics
Domestic
International War Against Radical
Islam
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