The Morning Call
5/4/17
The
Market
Technical
My
charting service will no longer be supported by Java and has been transfer to
another platform. As a result, I have
lost everything. It is going to take
some time for me to reconstruct my database, so bear with me.
The indices
(DJIA 20957, S&P 2388) were mixed (Dow up, S&P down) yesterday. Volume fell; I have not yet gotten the
breadth indicators working. Both remain above their 100 and 200 day moving
averages and the lower boundaries of uptrends across all major time frames---all
of which acts as support. That clearly
means that momentum remains to the upside.
So it is resistance that becomes important. Immediate resistance now exists at their former
highs (21228/2402) and ultimately at the upper boundaries of their long term
uptrends (23390/2591).
The VIX (10.7) was
up fractionally, but remains below its 100 and 200 day moving averages. However, it held above the lower boundaries
of its short and intermediate term trading ranges---perhaps indicating that it
has found support.
The long
Treasury and the dollar moved fractionally, providing no informational
value. Gold was smacked hard, likely reflecting
the more hawkish tone of yesterday’s FOMC statement (see below).
Bottom line: investors
seem stuck on the sidelines. We have
received some valuable input this week with the apparent resolution of the debt
ceiling bill and the FOMC meeting.
Neither had much impact (except on GLD).
Perhaps they are waiting on the April jobs report on Friday or the
French elections this weekend. Or maybe
they are so confused by the poor data and upbeat Fed, they don’t know whether
to s**t or go blind.
Short term
aside, the assumption remains that prices head higher, but remembering that
there are two big gaps to fill lower down.
Update
on insider selling (medium):
Fundamental
Headlines
The
economic data improved: the April ADP private payroll report, the April Markit
services PMI and the April ISM nonmanufacturing index came in better than
anticipated; weekly mortgage applications fell though purchase applications
rose. Remember that the service economy is
much bigger than the manufacturing side.
***overnight,
April UK Markit services PMI hit a four month high.
In
addition, it appears that GOP now has enough votes to pass repeal and replace
in the house. Of course, senate approval
is also needed. And the CBO has not
scored the latest revision. But credit
where credit is due---they haven’t stopped trying.
The
big news of the day was the conclusion of the latest FOMC meeting. It left rates unchanged; no surprise. However, the statement issued following the
meeting read like the bizarro world script from Seinfeld: the poor economic stats,
they were ‘transitory’; the lousy inflation numbers, not reflective of the Fed’s
chosen indicator; reducing the Fed’s balance sheet (the 900 pound gorilla),
radio silence. In short, the Fed
believes (says it believes) that everything remains awesome, so more rate hikes
are on the way---a bit more hawkish in tone than most expected.
The
bottom line: the risk here is that the Fed continues to tighten just as the
economy rolls over in what would be a normal correction after eight years of
expansion, albeit subpar. As you know, I
am not particularly concerned that about the economic consequences of the
unwinding of a disastrous monetary experiment.
But such a move would likely (1) destroy the blind faith in the Fed by at
least a portion of yet another new generation of investors and (2) reaffirm the
stupidity of trusting the Fed to all the subsequent generations of investors
that have already been f**ked enumerable times---my thesis that triggers the
unwind of the massive mispricing and misallocation of assets.
More
on the sh*tty job these guys have done (medium):
Investing for Survival
Wisdom
from Newton and Druckenmiller.
News on Stocks in Our Portfolios
Economics
This Week’s Data
The
April Markit services PMI was reported at 53.1 versus expectations of 52.3.
The
ISM nonmanufacturing index came in at 57.5 versus estimates of 55.8
The
March trade deficit was $43.7 billion versus forecasts of $44.5 billion.
Weekly
jobless claims were down 19,000 versus consensus of down 11,000.
First
quarter nonfarm productivity fell 0.6% versus projection of being flat; unit
labor costs rose 3.0% versus the prior reading of 1.7%
Other
Puerto
Rico files for bankruptcy (medium):
More
problems in China (medium):
And
Kyle Bass comments on them (short):
Politics
Domestic
International
Joke
of the day: North Korea threatens China (medium):
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