The Morning Call
5/12/17
Our daughter and her family
arrive today to celebrate Mother’s Day weekend.
So no Closing Bell tomorrow.
The
Market
Technical
The indices
(DJIA 20919, S&P 2394) sold off big early in the day, then rallied for the
remainder. Though they still finished
down. Intraday the Dow actually filled
one of the two gaps openings that I pointed out previously would likely be closed.
It will have to fall to 20590 to close
the other gap. The S&P did not fill
either. It will have to decline to 2355
to fill both. Volume was flat; breadth
was weaker. Both remain above their 100
and 200 day moving averages and the lower boundaries of uptrends across all
major time frames.
Yesterday’s
intraday recovering by the Averages supports my assumption that they will
probably successfully challenge their all-time highs (21228.2402); though the longer
they hang around current levels and the more unsuccessful challenges they make
on their former highs, the greater the odds that the next move is down.
However, that is not to suggest a Market top.
We will only know that when those support levels start to get violated.
The VIX (10.6) was
up 4 %, sufficient to close back above the lower boundary of its intermediate
term trading range, voiding Monday’s break.
It still has a gap overhead that would require it to trade at 12.2 to be
filled.
The long
Treasury and the dollar were unchanged; while GLD was up enough to close above
its 100 day moving average, avoiding a reversion from support to resistance.
Bottom line: while the indices finally showed a little life
intraday, their close left them hardly changed from the level of the last
two/three weeks. I continue to believe
that the question right now is, are the indices resting in preparation for an
assault on their former highs or have they shot their wad? Based on yesterday’s pin action, I think the
answer is likely the former; but we won’t know until it happens.
Fundamental
Headlines
Aside
from everything Comey, there was little occurring yesterday. US economic stats were mixed: weekly jobless
fell versus expectations of a rise, while April PPI ran hotter than anticipated---likely
reinforcing the June rate hike scenario.
***overnight,
the US and China announced a trade deal.
While many characterized it as ‘underwhelming’, it is a first step; and
remember the Chinese are incrementalists.
Overseas,
the Bank of England left rates and its bond purchase program unchanged, the EU
raised its 2017 GDP growth forecast and April Chinese vehicle sales fell 2.2%. All fitting developing global trends (strong
Europe, weak Asia).
***overnight,
the Chinese yield curve inverted (medium):
Bottom
line: politicians and the media continued to fill the headlines and airwaves
with commentary on the Comey firing. ‘Rhetoric aside, the only thing that matters,
economically speaking, is the impact this controversy has on the Trump fiscal
reforms. I think it too soon to
know. But if you believe the nonchalant
response of the Market, this is much ado about nothing.’
And
speaking of Trump fiscal reforms, here is David Stockman’s view (medium):
My
thought for the day: it is important to remember that most of us are not
investors; we are savers, who are allocating all or part of that savings to
securities. It doesn’t sound as sexy as
being an investor; and unfortunately, the investment business wants you to be
believe that you are investor so that they can sell you something sexy (which
generally carry higher commissions). The
best strategy we savers can follow is to keep risk at a tolerable level, minimize
our trading costs while trying to achieve a growing income stream.
Investing for Survival
Buying/selling/
holding is the hardest part.
News on Stocks in Our Portfolios
C.H. Robinson Worldwide (NASDAQ:CHRW) declares $0.45/share quarterly dividend, in line with
previous.
Economics
This Week’s Data
April
CPI was up 0.2%, in line; ex food and energy, it was up 0.1% versus estimates
of up 0.2%.
April
retail sales were up 0.4% versus expectations of up 0.6%; ex autos, they were
up 0.3% versus forecasts of up 0.5%.
However, the March numbers were revised up substantially, making the two
months together a wash.
Other
Dutch
politicians take on Draghi (medium):
Update
on student loans (medium):
The
latest on Canada’s mortgage lending problem (medium):
Update on oil (medium):
Politics
Domestic
On Comey and the
press; from one of my favorite liberal blogs (medium and a must read):
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