The Morning Call
3/13/17
The
Market
Technical
Monday Morning Chartology
As
usual, the S&P’s chart speaks for itself---a relentless advance.
At
the end of a horrible two weeks of pin action, the long Treasury did manage to
bounce off the lower boundary of its short term trading range. What matters at this point is follow through
to the upside. If not, then the short
term trading range resets to down and the lower boundary of its intermediate
term trading range is only a couple of points away.
GLD’s
chart has gone from hopeful to hopeless.
It did advance ever so slightly on Friday, in keeping with a rising TLT
and a declining dollar. However, the
move was almost undetectable and suggests gold investors aren’t buying lower
rates and a weakening dollar.
The
dollar fell below the lower boundary of its very short term trading range; a
close there today would negate the trend. The action of bonds (rates lower) and
the dollar (price weakness) is consistent.
Now we see if Friday was a respite or a change in trend.
The
VIX remains near its historical low, indicating complacency among
investors. It is trying to set a very
short term uptrend but that doesn’t carry a lot of weight when it is solidly
below its 100 and 200 day moving averages and in a short term downtrend. Still all changes in trend start somewhere.
Fundamental
Headlines
Last week’s
economic indicators were weighed to the negative side, while the primary
indicators (January factory orders [+] and fourth quarter productivity and unit
labor costs [-]) were a wash. Adding to
these downbeat numbers, the Atlanta Fed revised lower its first quarter GDP
growth forecast twice. The score: in the
last 75 weeks, twenty-four were positive, forty-three negative and eight
neutral.
Overseas, the
stats continued their winning ways. In
addition, the ECB left rates unchanged which puts them at odds with the Fed
which it is believed will to raise rates again this week. That said, in a post
meeting press conference, Draghi acknowledged that economic conditions were
improving, suggesting that a change in policy is in the future. That should keep currency valuations (trade) stable.
The Bank of
Japan also appears to be moving toward some sort of ‘tapering’ (medium):
How far the Fed
is behind the curve (short):
The latest from
Bill Gross (medium):
The model was
doomed to fail (medium):
http://www.zerohedge.com/news/2017-03-12/consuming-our-future-das-warns-model-was-always-doomed-fail
Update on
Buffett indicator (short):
Investing for Survival
Ritholtz
rules of valuation.
News on Stocks in Our Portfolios
Economics
This Week’s Data
Other
What
it took to buy a dollar’s worth of GDP in 2016 (medium):
Update
on household net worth (short):
Politics
Domestic
International War Against Radical
Islam
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for Survival’s website (http://investingforsurvival.com/home)
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