The Morning Call
10/17/16
The
Market
Technical
Monday Morning Chartology
The
S&P successfully challenged its 100 day moving average and the lower
boundary of its short term uptrend last week and is building a very short term
downtrend; so momentum is fading at least for the moment. As you can see, if it pushes below the 2133 support
level, it has a ways to go before encountering additional support.
October
options expiration prone to wild swings (short):
The
long Treasury had another lousy week. It
is now below its 100 day moving average, in a very short term downtrend and is challenging
another Fibonacci support level and its 200 day moving average. However, it continues to trade within uptrends
across all timeframes; so all is not tears and rain. But TLT is getting closer to challenging its
short and intermediate term uptrends.
GLD
is attempting to stabilize at a Fibonacci level. Given its violation of its 100 and 200 day
moving averages and it resetting to a short term downtrend, which might be a
tall order.
Volatility
picked up last week. While it is off its
high, it is nonetheless over its 100 day moving average and in a very short
term uptrend---not good for stocks.
Still it remains in a short term downtrend. Until that resistance gets successfully
challenged, I have to assume that momentum is to the upside.
Fundamental
There was not a lot of data
released last week. What we got was mostly
negative. Further, there was only one primary
indicator recorded: September retail sales and they were in line. So the week was negative but flimsy. Indeed, I am tempted to not even score
it; but data is data and I have to work with what I am given. The score is now: in the last 56 weeks,
sixteen were positive, thirty-six negative and four neutral.
Overseas,
this was the strongest week (I know I have said that several times of late) in
some time. While it is still too soon to
know, the good news may be that the global economy has finally stopped
decelerating. The potential bad news (for
investors) is that the Fed has used the weak world economy as a major reason
for not raising rates.
The
central banks were the usual busy little beavers. The Bank of Japan walked back the slightly
more hawkish tone of their last communique; and the Wednesday release of the
last FOMC minutes also read a bit more dovish.
I assume that means that QE is still the game plan and that the December
rate hike is less probable---although as you know, I have never thought that we
would get one anyway.
The
latest on Deutschebank (medium):
***overnight,
both Yellen and the ECB suggested that they might join the BOJ in its yield curve
‘steepening’ policy. (medium and a must read)
China
upping stimulus (medium):
Back
in the headlines are the third quarter earnings reports which started off on a
sour note (and this is a big week). Of
course, we are still in the early stages; so it is too soon to be making
judgments about how they will turn out.
That said, if they remain subpar that is not likely a plus for the
Market.
The
latest from Doug Kass (medium):
Investing for Survival
The
most complicated simple problems
News on Stocks in Our Portfolios
Economics
This Week’s Data
The
October NY Fed manufacturing index came in at -6.8 versus expectations of +1.0.
Other
The
flawed logic of inflation (medium):
Inflation
and the Fed Funds rate (short):
The
Atlanta Fed lowers its third quarter GDP growth estimate again (short):
Drowning
in debt (medium):
Politics
Domestic
1.4 million
Americans will lose their healthcare coverage in 2017 (medium):
International War Against Radical
Islam
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for Survival’s website (http://investingforsurvival.com/home)
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