The Morning Call
6/14/17
The
Market
Technical
The indices
(DJIA 21328, S&P 2440) had a good day, with (1) the Dow closing above its
former high for the third day, confirming the break and putting it back in
unison with the S&P and (2) the S&P leaving last Friday’s outside down
day as nothing more than an oddity. At
the moment, I see nothing, technically speaking to inhibit the Averages
challenge of the upper boundaries---now circa 24198/2753. Volume declined and breadth improved.
The VIX (10.4) was
off 8 ¾ %, finishing below its 100 and 200 day moving averages and above the
lower boundaries of its intermediate and long term trading ranges.
The long
Treasury managed a slight uptick, leaving it below its 200 day moving average
but above its 100 day moving average and in a very short term uptrend. The gap between the upper boundary of its
short term downtrend and lower boundary of its long term uptrend continues to
narrow.
The dollar was
also down, leaving its chart with an ugly look---ending in a very short term
downtrend and below its 100 and 200 day moving averages.
GLD recovered, ending
above its 100 and 200 day moving averages.
Plus, the 100 day moving average is about to cross above its 200 day
moving average which is usually a positive technical signal. However, this chart is getting a bit
ugly.
Bottom line:
yesterday’s pin action ended the period of divergent behavior of the Averages
and sets the stage for their advance toward the upper boundaries of their long
term uptrends.
Fundamental
Headlines
Yesterday’s
US stats were mixed: the May small business optimism index was slightly better
than anticipated, month to date retail chain store growth rate slipped from the
prior week and the May PPI headline number was less than expected while the ex
food and energy figure was higher.
Overseas, May
German investor confidence unexpectedly declined; May UK CPI came in hotter
than anticipated.
***overnight,
May Chinese retail came in as expected, fixed investment was lower than
anticipated while industrial output was higher.
In
the center ring yesterday was the Jeff Sessions’ congressional testimony which
was not worth the price of admission.
More much ado about nothing.
Given the pin action, it would also appear that is the Street
consensus. If you have been asleep or
in the Outback and missed it, a decent summary is below.
http://www.zerohedge.com/news/2017-06-13/watch-live-sessions-testifies-senate-intelligence-committee
Bottom line: it
has been a relatively boring start to the week; but activity picks up today
with the conclusion of the FOMC meeting and the start of a busy three days of
economic data releases.
‘Of course, as long as all news is good
news, none of this will matter; and until some factor alters current Market
psychology, investors will likely continue to bid up stock prices as they have
been for the last two years.’
More
on valuation (medium):
The
latest from Doug Kass (medium):
The
latest from Bill Gross (medium):
The
latest from Lance Roberts (medium):
My thought for the
day: good investors have a high regard
for uncertainty---i.e. that anything can happen. They have learned that they can never be
confident that their investment strategy/discipline/model is going to
work. As a result, part of that
strategy/discipline/model has to allow for an escape hatch. That is the whole point behind my integrating
a Stop Loss Price into my Buy Discipline---my model can be wrong and I don’t to
pay too high a price for it.
Subscriber Alert
The
stock price of South Jersey Industries (SJI-$38) has traded into its Sell Half
Range. Coincidentally, I have been in
the process of updating the file on SJI and as fate would have it, the company
failed to meet the quality criteria for inclusion in the Dividend Growth
Universe. Accordingly, the Dividend
Growth Portfolio will Sell its entire position in SJI at the Market open.
Investing for Survival
The
unknown unknowns of investing.
News on Stocks in Our Portfolios
Economics
This Week’s Data
Month
to date retail chain store sales grew at a slower pace than in the prior week.
Weekly
mortgage applications rose 2.8% while purchase applications fell 3.0%.
May
CPI was down 0.1% versus consensus of 0.0%; ex food and energy, it was up 0.1%
versus estimates of up 0.2%.
May
retail sales fell 0.3% versus expectations of up 0.1%; ex autos, they declined
0.3% versus projections of up 0.2%.
Other
More
on auto loans (medium):
David
Stockman on the upcoming vote on the debt ceiling (medium):
Politics
Domestic
More suits filed
against the Trump administration (medium):
International War Against Radical
Islam
Game
theory + Qatar cut off = uh oh (short):
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
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