The Morning Call
5/17/16
The
Market
Technical
The indices
(DJIA 17710, S&P 2066) rallied hard off of last week’s disappointing
performance, though volume was flat and breadth mixed. The
VIX fell 2.5% but that was actually less than I would have thought; it
continues to act as if it has made a bottom.
The
VIX is too low (short):
The Dow closed
[a] above its 100 day moving average, now support, [b] above its 200 day moving
average, now support, [c] within a short term trading range {17498-18736}, [c]
in an intermediate term trading range {15842-18295} and [d] in a long term
uptrend {5541-19413}.
The S&P
finished [a] above its 100 day moving average, now support, [b] above its 200
day moving average, now support, [c] in a short term trading range {2039-2110},
[d] in an intermediate term trading range {1867-2134} and [e] in a long term
uptrend {830-2218}.
The long
Treasury fell, ending back below the upper boundary of a very short term downtrend,
but within a short term uptrend, over its 100 day moving average and a key
Fibonacci support level.
GLD was up,
closing within very short term and short term uptrends as well as above its 100
day moving average. It is continuing to
eye the upper boundary of its intermediate term trading range.
Soros adds to
his gold holdings (short):
Bottom line: despite
all the jubilation yesterday, the move up was on low volume, mixed breadth and
left the Averages within very short term downtrends. As long as they remain above the lower boundaries
of their short term trading ranges, the technical damage in minimal. So I am watching how they behave around those
boundaries as well as their very short term downtrends.
Fundamental
Headlines
Yesterday’s
US economic news was a downer---the May NY Fed manufacturing index was awful
while the NAHB index was just below expectations. Overseas, the Chinese economy continues to
disappoint---to the extent that we know even a rough approximation of the
numbers.
***overnight.
UK inflation came in below expectations, first quarter French GDP was reported
below estimates while debt to GDP was reported above.
Bottom
line: so everything remains awesome!
Right? What could possibly be of
concern with the economies of China, Japan, the US and, at least, chunks of
Europe slowing, US corporate earnings growth flattening and the possibility of
a Grexit or Brexit or both approaching? But,
but, oil prices are up---which we are being told is a major plus by the same
group who told us that declining oil prices were a major plus. And me without my spoon.
Whatever
the bulls are selling, I am not buying.
I continue to believe that cash may be the most valuable asset in your
portfolio.
Investing for Survival
Savings
and future returns.
News on Stocks in Our Portfolios
Revenue of $22.76B
(+9.0% Y/Y) beats by $410M
Economics
This Week’s Data
The
May National Association of Homebuilders index came in at 58 versus
expectations of 59.
April
CPI was up 0.4% versus estimates of up 0.3% while CPI, ex food and energy was
in line.
April
housing starts were up 7.6% versus forecasts of up 4.2%
Other
The
recent history of household net worth (medium):
Politics
Domestic
Quote of the day
(short):
Confessions of a
congressman (medium and today’s must read):
International War Against Radical
Islam
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for Survival’s website (http://investingforsurvival.com/home)
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