The Morning Call
5/8/17
The
Market
Technical
The
S&P is closing in on its former high (2402), as is the Dow (21228). Volume in the last week has been low relative
to the last five months and breadth is not that great. But with support from its moving averages and
all major trends, I have to assume that the Averages will successfully
challenge those former highs and move on the upper boundaries of their long
term uptrends (23500/2620).
The
long Treasury stayed within a trading range dating back to November 2016. While it is below the upper boundary of its
short term downtrend, it has support at its 100 day moving average and the
lower boundaries of its intermediate term trading range and its long term
uptrend. Just looking at the pin action
back to November (the election), its pin action is not indicative of an
improving growth, higher interest rate environment.
GLD
broke the lower boundary of its short term uptrend last week, resetting to a
trading range. It still has support from
its 100 day moving average and the lower boundary of its newly reset short term
trading range. The aforementioned break
is the first sign that gold investors are concerned about higher interest
rates.
The
dollar continued to weaken last week. It
is below the upper boundary of a very short term downtrend and its 100 day
moving average and is nearing the lower boundary of its short term
uptrend---which is also the lower boundary of a pennant formation. Here again, this is not the pin action of investors
betting on a growing economy and rising interest rates.
The
VIX is hovering above the lower boundaries of its intermediate and long term
trading ranges, having turned back three challenges in the two weeks. It is firmly below its 100 day moving average
and its short term downtrend; but notice the large gap overhead---which almost
surely be filled.
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