The Morning Call
3/30/17
The
Market
Technical
The indices
(DJIA 20659, S&P 2361) turned in a mixed performance yesterday (Dow down,
S&P up). Volume declined noticeably;
breadth was mixed. The VIX (11.4) fell 1
%, ending slightly below the lower boundary of its very short term uptrend (if
it closes there today, the trend will be negated), below its 100 day moving
average (now resistance), below its 200 day moving average (now resistance) and
in a short term downtrend. If it confirms
the break of that very short uptrend, complacency will be back.
The Dow closed
[a] above its 100 day moving average, now support, [b] above its 200 day moving
average, now support, [c] in a short term uptrend {19181-21498}, [c] in an
intermediate term uptrend {11884-24736} and [d] in a long term uptrend
{5751-23298}.
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 {2242-2575},
[d] in an intermediate uptrend {2077-2681} and [e] in a long term uptrend
{881-2561}.
The long
Treasury was up, remaining above its 100 day moving average (now support),
below its 200 day moving average (now resistance), in a short term trading
range and in a very short term downtrend.
GLD rose, finishing
above its 100 day moving average (now support), below but near its 200 day
moving average (now resistance) and within a short term downtrend.
The dollar increased
fractionally, ending below its 100 day moving average (now resistance), above
but near its 200 day moving averages (now support) and in a short term uptrend.
Bottom line: the
indices stalled on relatively low volume.
The Dow actually made a second lower high, while the S&P inched
slightly above Tuesday’s close. In
either case, they remained within developing very short term downtrends; so the
question remains, was the recent downdraft part of a consolidation move or
marked a change of direction. We wait to
see.
Update
on NYSE margin debt (medium):
Fundamental
Headlines
Two
minor economic datapoints were released yesterday: weekly mortgage applications
were down while purchase applications were up; and February pending home sales
rose sharply.
Overseas,
the UK triggered the Brexit process; and the ECB hinted that it is wary of any
tightening of monetary policy.
Meanwhile
back at the ranch, the Fed is out in force this week. (on the one hand) Following Fischer’s
interview yesterday which was widely interpreted as dovish, (on the other hand)
two more Fed chiefs spoke sounding a bit more hawkish. And to delight the
crowd, four more speak today and two tomorrow. Confusion remains the best strategy.
Bottom
line: leave it to the Fed to muddy the water.
After Fischer got investors feeling all warm and fuzzy about a dovish
Fed, two of his compatriots disabuse the notion and confuse the lemmings. That said, the Fed has been, is and forever
will be dovish and always behind schedule tightening monetary policy. The
question is, is it so far behind the curve that it will be raising rates just
as the economy rolls over? As you know, I
don’t think that such an occurrence would be that damaging to the economy but
could prove disastrous to the Markets.
My
thought for the day: If you have credit card debt and are thinking about
investing in anything, stop. You will never beat the 18-30% annual interest
charge.
Investing for Survival
Seven
traits of successful investors.
News on Stocks in Our Portfolios
Revenue of $795.8M (+5.7%
Y/Y) misses by $3.23M.
Economics
This Week’s Data
February
pending home sale index rose 5.5% versus expectations of up 2.4%.
http://www.zerohedge.com/news/2017-03-29/pending-home-sales-smash-expectations-jumps-most-april-2010
The final revision of
fourth quarter GDP showed growth of 2.1% versus estimates of 2.0%; corporate
profits were up 22.3% versus the third quarter reading of up 4.3%.
Weekly
jobless claims fell 3,000 versus forecasts of down 11,000.
Other
Even
more on auto loans (medium):
Update
on oil prices and bank lending (medium):
Current
US infrastructure spending (chart):
Improving
corporate revenues (short):
Politics
Domestic
The American
opioid epidemic (medium):
International War Against Radical
Islam
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