The Morning Call
4/10/17
The
Market
Technical
The
S&P remains above both moving averages and in uptrends across all major
timeframes. However, it has been unable to
break above the upper boundary of a very short term uptrend. It did make a determined intraday try on
Wednesday but failed. That said, last
week’s economic numbers as well as the ruling class actions gave the bulls
every reason to give up the ship. But
they held in. As I noted on Friday ‘It seems like no matter the import of a
headline (development), it is not enough to jar either buyers or sellers loose
from their pre-existing investment scenarios. So it would appear that it will take something
extraordinary to break that mindset.’
The
long Treasury keeps trying (six times) to break above that minor resistance
level but has been unsuccessful. That
trend line along with the lower boundary of its short term trading range seem
like the battle lines between the forces betting for Trumpflation versus those wagering
on a weakening economy. As long as TLT
remains within those boundaries, the fight goes on; a move above minor
resistance---economic weakness; a move below the lower boundary of the short
term trading range---Trumpflation.
The
dollar looks like it is about to affirm the Trumpflation trade. It is in a short term uptrend, above its 100
day moving average (now support), above its 200 day moving average (now
resistance; but if it remains there through the close Wednesday, it will revert
to support) and right on the upper boundary of its very short term downtrend
GLD
traded up on volume, finishing above its 100 day moving average and a short
term downtrend. Like TLT and UUP, GLD attempted
to challenge a resistance level (in this case, its 200 day moving average) but
was unsuccessful.
As
you can see, the VIX is being gradually squeezed by a rising lower boundary of
a very short term downtrend and its 100 day moving average and a declining
upper boundary of a short term downtrend and its 200 day moving average. As long as it remains within these converging
trends, little can be confidently said about its direction. However, a break above or below these support/resistance
points would likely provide that directional guidance.
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