The Morning Call
3/23/17
The
Market
Technical
The indices
(DJIA 20661, S&P 2348) had a mixed day (Dow down, S&P up). Volume fell; breadth was weak. The VIX (12.8) was up another 2 ¾ %, ending
above the lower boundary of its very short term uptrend, above its 100 day
moving average (now resistance; if it remains there through the close on
Friday, it will revert to support), below its 200 day moving average (now
resistance) and in a short term downtrend.
It appears that the thesis that the period of complacency could be ending
remains in place.
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 {19115-21431}, [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 {2234-2568},
[d] in an intermediate uptrend {2072-2676} and [e] in a long term uptrend
{881-2561}.
The long
Treasury was up 0.50%, but closing above its right on its 100 day moving average
(now resistance; if it remains there through the close of Friday, it will
revert to support), below its 200 day moving average (now resistance) and in a
very short term downtrend.
GLD rose slightly,
finishing above its 100 day moving average (now support), below its 200 day
moving average (now resistance) and within a short term downtrend.
The dollar fell,
ending below its 100 day moving average (now resistance), above its 200 day
moving averages (now support) and in a short term uptrend.
Bottom line: investors
appeared to go the sidelines to await the final disposition of the Trumpcare
vote (today, sometime); but both of the Averages remained below the lower boundary
of its very short term uptrend---negating those trends.
There clearly was
little follow through to the downside which I think reflects the continuing
underlying bid in the Market---or at the very least, an unwillingness to give
up on the post-election Trump euphoria. With
the voiding of the Averages very short term uptrends, the most visible downside
support has shifted to the lower boundaries of their short term uptrends.
The pin action
in gold, the long Treasury and the dollar are all pointing to a lower magnitude
and/or longer time horizon for the Trump fiscal program.
Trump
trade 1.0 is over (medium):
Fundamental
Headlines
Two
housing datapoints were released yesterday, neither good and one a primary indicator:
weekly mortgage and purchase applications fell while existing home sales
declined more than anticipated. Nothing
overseas.
***overnight,
banks scramble for free ECB money (medium):
The
Market spent the day seemingly trying to digest Tuesday’s shellacking together
with the odds Trumpcare passing the house vote today. Consensus appears to be congealing around the
notion that the bill will squeak by the house and be DOA in the senate. Of course, we knew the latter well before
anyone thought to be negative about the odds of passage in the house. Meaning house approval was, is and will be
irrelevant. But, but, but, investors may
be viewing the house vote as a key to Trump’s vaunted ability to cut a deal. If he can’t, then magic would be over. So in that sense, it could be critical.
Bottom line: whatever
happens, I continue to believe that the success of the Trump fiscal plan has
been priced for perfection; it may occur in some form but the magnitude and
timing have likely been over estimated by the Market.
Thoughts
from Barry Ritholtz (medium and a must read):
An
optimistic appraisal of valuations (medium):
Old
age adages about the stock market (short):
My
thought for the day: by identifying the right entry price for a stock, you
create an advantageous risk/reward for yourself. That is a major reason I created my pricing
model with its price disciplines---to insure that a stock is bought only when
it is near an historical relative price low thereby reducing the risk of
significant downside.
Investing for Survival
Myths
in investing #6
While I agree that long
term gold does not provide a very good hedge for your Portfolio, it can be
quite useful as a sedative in the midst of a bear market. It just has to be traded off the charts.
News on Stocks in Our Portfolios
Revenue of $8.32B (+4.7%
Y/Y) misses by $20M.
Economics
This Week’s Data
February
existing home sales fell 3.7% versus expectations of down 2.3%.
Weekly jobless claims
rose 15,000 versus estimates of a 1,000 decline.
Other
More
on declining used car sales (medium):
Art
bubble popping (medium):
And
for the trifecta, update on student loans (medium):
Problems
in the Chinese banking sector (medium):
Politics
Domestic
International War Against Radical
Islam
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