The Morning Call
2/3/17
The
Market
Technical
The indices
(DJIA 19884, S&P 2279) had a mixed day (Dow down, S&P up slightly). Volume fell but remained at elevated levels;
breadth was negative. The VIX (11.9) was
up fractionally, closing below its 100 and 200 day moving averages (now
resistance) and in a short term downtrend.
The Dow ended
[a] above its 100 day moving average, now support, [b] above its 200 day moving
average, now support, [c] in a short term uptrend {18655-20695}, [c] in an
intermediate term uptrend {11740-24592} and [d] in a long term uptrend
{5730-20736}.
The S&P
finished [a] above its 100 day moving average, now support, [b] above its 200
day moving average, now support, [c] within a short term uptrend {2179-2522},
[d] in an intermediate uptrend {2038-2639} and [e] in a long term uptrend
{881-2500}.
The long
Treasury declined slightly, remaining in a very short term downtrend, near the
lower boundary of its short term trading range and below the 100 day moving
average (now resistance), falling further below its 200 day moving average (now
resistance).
GLD rebounded,
ending close to reestablishing a very short term uptrend and challenging its
100 day moving average (now resistance).
It remained below its 200 day moving average (now resistance) and within
a short term downtrend.
The dollar rose,
bouncing off its 100 day moving average (now support) and above 200 day moving
averages (now support) and in a short term uptrend. However, it continues to develop a very
short term downtrend.
Bottom line: yesterday
was another quiet day with the Averages remaining within their trading ranges
dating back to mid-December but below the 20000/2300 levels. I am waiting for a move below the
aforementioned trading range or above 20000/2300 as an indication of Market
direction. Until then, patience.
However,
TLT, UUP and GLD appear to be about to challenge the first resistance/support levels
that could lead to directional changes.
My interest is in GLD which I think would be a trade if it reestablishes
a very short term uptrend and successfully challenges its 100 moving average.
Fundamental
Headlines
Yesterday’s
economic data improved: weekly jobless claims fell more than anticipated,
fourth quarter productivity was better than expected while January retail chain
store sales were below estimates.
Nothing from overseas.
Thursday
with Trump: following the ‘Iran is on
notice’ pronouncement, he wasted no time in announcing new sanctions
Friday
with Trump: a busy day for the Donald including an executive order reversing
some parts of Dodd Frank (short)
More
on the Dodd Frank rollback. While I have
been applauding almost all of the Trump deregulation moves, at first blush,
this looks like it is not in the best interest of the retail consumer.
The latest from
Nouriel Roubini (medium):
Bottom
line: the economic dataflow is not particularly
good; and to date, the Donald hasn’t done much to improve it. To be
sure, he is delivering on his campaign promises with a vengeance; but in the process,
he has been stepping on the toes of not only the US but the international establishment. That
is not a bad thing in and of itself. God
only knows that the global ruling class has done a lot more to improve their own
lives than they have ours.
But so far,
Trump has delivered more angst than better economic policy. Indeed as I have repeated pointed out, the
most important economic issue that he has focused on is trade; and what he says
that he intends to do in that regard would likely be detrimental to the economy.
Plus, not only has there been a dearth
of discussion on his major economic pledges (taxes and infrastructure spending)
but there is reason to believe that they may be nonstarters.
The point here is
that there is a risk the Market may tire of aggressive dialogue in the absence of
meaningful steps to improve the economy.
Small wonder that investors may be
developing heartburn---and at valuation levels that leave little room for
error. I would continue to sell a portion of my successful positions and get
rid of my losers.’
More on valuation
(medium):
My thought for
the day: No successful football teams steps on the field without a game plan;
no successful company opens its doors without a business plan; and no investor
can be successful without a strategy which includes price parameters for
purchase and risk parameters for an exit.
That is why I created our Valuation Model which keeps the investor from
paying too much for a stock and forces him/her to sell either after a price
objective has been met or to avoid a major loss.
Investing for Survival
Myths
in investing #3
News on Stocks in Our Portfolios
Economics
This Week’s Data
January
retail chain store sales growth were below expectations.
January
nonfarm payrolls rose 70,000 versus estimates of 19,000.
Other
Dividends
indicate diminishing distress on US economy (short):
Update
on student loans (medium):
Quote
of the day (short):
China
suffers record capital outflow in 2016 (short):
Politics
Domestic
International
British government publishes Brexit
white paper (medium):
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
No comments:
Post a Comment