Monday Morning Chartology

The Morning Call

5/2/16

The Market

         

    Technical

       Monday Morning Chartology

            The S&P had a rough week, challenging the lower boundary of its short term uptrend.  If it ends there today, the short term will reset to a trading range.  It has also made a second lower high.  Nevertheless, the Dow is holding within its short term uptrend.  Plus there are enough internal indicators that have been positive for the last month and remain so.  It is too soon to get beared up technically.

            The long Treasury had a decent week, bouncing off its 100 day moving average and a key Fibonacci level.  It remains in a short term uptrend but is also in a very short term downtrend.  I am looking for a move out of the range between the Fibonacci level and the upper boundary of its intermediate term trading range to provide an indication of direction.

            GLD had a great week, making a new high.  It is now inches (1.25 points) from the upper boundary of its intermediate term trading range.  If it breaks that level, there is a lot of room to run to the 140 level.

            The VIX had a good week.  It looks like it has made a triple bottom off the lower boundary of its short term trading range---not a good sign for stocks.

    Fundamental

            ***overnight, April Japanese domestic manufacturing, Chinese flash manufacturing PMI and the EU composite flash PMI came in below expectations.  This calls into question the weight that should be allotted to last week’s upbeat global stats.  More info needed.

In addition, a major troubled Italian bank was unable to raise equity capital, meaning the recently formed Italian bank bailout fund will have to be used.  Finally, Puerto Rico will miss a $422 million bond payment today.

              Investing for Survival

   

            The perils of being a contrarian.

            http://www.bloombergview.com/articles/2016-04-18/if-you-re-a-contrarian-you-re-like-everyone-else

    News on Stocks in Our Portfolios

 

Chevron (NYSE:CVX): Q1 EPS of -$0.39 misses by $0.19.

Revenue of $23.56B (-31.8% Y/Y) beats by $2.13B.

Paychex (NASDAQ:PAYX) declares $0.42/share quarterly dividend, in line with previous.

Economics

   This Week’s Data

   Other

Politics

  Domestic

More problems for Hillary (medium):

http://www.zerohedge.com/news/2016-05-01/seymour-hersh-says-hillary-approved-sending-libyas-sarin-syrian-rebels

  International

            China denies US carrier group access to Hong Kong port (medium):

            http://www.zerohedge.com/news/2016-04-29/latest-us-china-escalation-beijing-denies-us-aircraft-carrier-access-hong-kong-port

            The ISIS/Turkey connection (medium):

            http://www.zerohedge.com/news/2016-04-29/erdogan-father-isis-new-documentary-outlines-turkeys-support-islamic-state

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