The Morning Call
4/11/16
The
Market
Technical
Monday Morning Chartology
The
S&P appears to be rolling over, having voided a very short term uptrend and
unsuccessfully challenged the upper boundary of its short term trading range. I marked in red three tries to break above
the upper boundary of its intermediate term trading range; then I marked in
orange four lower highs following the aforementioned attempts to challenge its
intermediate term trading range. Having
said all that, these are just potential warning signs that may or may not have
any follow through. As always it is the
follow through that counts.
Stock
performance during April option expiration week (short):
Update
on best stock market indicator ever (short):
The
dollar closed below the lower boundary of its short term trading range on
Friday. You can see that it has unsuccessfully
challenged this boundary a couple of times over the last two years; so this
could be just another false alarm. That
said, I have put this chart next to the S&P because of their similarities,
i.e. both have been trading sideways for over a year. If the dollar breaks lower, that is likely not
a good sign for stocks.
The
long Treasury had a good week, finishing within very short term and short term uptrends
and above its 100 day moving average and a key Fibonacci support level. This performance is a sign of a growing
risk-off trade.
Gold
continues to struggle through a consolidation process. While it had a good week, it still has work
to do overcoming a very short term downtrend.
Last
week, the VIX managed to void a very short term downtrend. You can see that the lower boundary of its
short term downtrend offered support. It
is still well below its 100 day moving average.
Nonetheless, it probably a good time to institute any portfolio
insurance trades. Our Aggressive Growth
Portfolio will Buy a 25% position in VXX (18.4) at the Market open. Please remember this is a very short term
hedging position.
Fundamental
***the
globe’s bureaucrats were busy little beavers over the weekend: an IMF paper
said negative rates have boosted demand (what demand?), Chinese consumer
inflation was slightly lower than expected (and not coincidentally, the Bank of
China meets this week), Iran said that its missile program was not up for
negotiations (surprise, surprise), central bankers are meeting to finalize
plans to bail out Italian banks (you want parmesan on that?), Austria forcibly ‘bails
in’ senior creditors of a failed bank (you want parmesan on that?), statements
by Japanese officials suggest that it might not live by the
cease-competitive-currency-devaluations accord formulated at the recent G29
meeting (hot sake?) and apparently someone took note of the emergency Fed
meeting today, because Yellen meets with Obama immediately after (get your galoshes
on because its going to get deep).
Goldman
on the upcoming OPEC meeting (medium):
Bill
Gross and Larry Fink on negative interest rates (sorry, Christine):
Investing for Survival
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News on Stocks in Our Portfolios
·
Procter & Gamble
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increase from prior dividend of $0.6629.
·
Forward yield 3.22%
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