The Morning Call
4/25/16
The
Market
Technical
Monday Morning Chartology
The
S&P continues to perform well. It
has busted through two of the prior lower highs (the orange 3 and 4) and reset
to a short term uptrend. You can see the
congestion (the red 1,2,3 and the orange 1,2) that I have mentioned. Nevertheless, the momentum remains to the
upside and it seems likely that the former all-time high will be challenged.
Update
on best Market indicator (short):
Once
again, I included a chart of the dollar.
You can see that it looks to have made a double bottom. If the inverse correlation that has existed with
the Averages since January continues, this could be a negative for stocks.
The
long Treasury had a rocky week. It
traded through the lower boundary of a very short term uptrend and a key
Fibonacci level. It is now approaching a
prior short term low. Failure to hold
above it would suggest either rising risk of inflation (see GLD) or a less accommodative
Fed (is that possible?).
After
a great run, GLD has run into some, at least, minor headwinds. One day after voiding a very short term downtrend,
it traded back below the upper boundary.
On the other hand, it held above a key Fibonacci level. If that is taken out, then the lower boundary
of its short term uptrend becomes a target.
The
VIX continues to hover around the lower boundary of its short term trading
range. Any bounce off that level will
likely lead to additions to the Aggressive Growth Portfolios holding of VXX.
Fundamental
***overnight,
the April German business climate index fell, China’s government debt hit 237%
of GDP and the Bank of Japan revealed that it was among the top ten
shareholders of 90% of Japanese companies (that has to end well).
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(medium):
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