Monday Morning Chartology

The Morning Call

12/12/16

The Market

         

    Technical

       Monday Morning Chartology

            What can I say that I haven’t already?  Stocks are on a tear.  Where they stop nobody knows.  I still believe that the S&P won’t successfully challenge the upper boundary of its long term uptrend (2410); but that is still another 7% to the upside.  If I were a trader (and I am not), I would consider buying a position in a Market ETF and use a very tight stop. 

            TLT (117.5) is once again challenging the lower boundary of its short term trading range (117.3) on heavy volume.  If that is successful, then the lower boundary of its intermediate term trading range is not much lower (115.4).   And the lower boundary of its long term uptrend is not much below that level (111.3).  If the bond market continues to get trashed (i.e. rates up), at some point, it is going to start having an impact on stock valuation models.

            http://www.zerohedge.com/news/2016-12-12/global-bond-rout-returns-vengeance-sending-10y-yields-highest-over-two-years

    

        Like TLT, it looks like we can give up on any thoughts that GLD (110) could be stabilizing.  There is really no technical support between its current level and the lower boundary of its intermediate term trading range (100) save a couple of Fibonacci retracement levels.

            The dollar broke through the upper boundary of its short term trading range for a third time (a charm?).  If it remains there through the close on Tuesday, it will reset to an uptrend.   Given its two prior failures, this move needs to have follow through for me to be convinced it is a true break out.

            The VIX (11.75) is in a sharp very short term downtrend, reflecting the Titan III shot in stocks.  It is also below its 100 and 200 day moving averages as well as within a short term downtrend---all of this suggesting more downside.  It is approaching the lower boundary of its intermediate term trading range (10.25) and the lower boundary of its long term trading range (9.8). These boundaries were set back in 2006---something to think about.

    Fundamental

       Headlines

            ***Overnight, OPEC agreed on production cuts.

            http://www.zerohedge.com/news/2016-12-11/saudi-shock-and-awe-sparks-buying-panic-crude-wti-17-month-highs

            And the ECB rejected a request from Monte Paschi for more time to arrange private financing; however, the Italian treasury said that it would help with the recap.

       Investing for Survival

   

            Seven impossible rules to follow.

            http://www.advisorperspectives.com/commentaries/2016/12/06/7-impossible-trading-rules-to-follow

    News on Stocks in Our Portfolios

 

Economics

   This Week’s Data

   Other

            Speculation grows that Japan will tighten next (medium):

            http://www.zerohedge.com/news/2016-12-11/speculation-grows-japan-will-tighten-next

            Update on student loans (short):

            http://www.advisorperspectives.com/dshort/commentaries/2016/12/09/the-fed-s-financial-accounts-what-is-uncle-sam-s-largest-asset

            Quote of the day (short)

            http://cafehayek.com/2016/12/quotation-of-the-day-1921.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CafeHayek+%28Cafe+Hayek%29

Politics

  Domestic

What could go wrong here (medium)?

http://www.zerohedge.com/news/2016-12-10/senate-quietly-passes-countering-disinformation-and-propaganda-act

  International War Against Radical Islam

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