The Morning Call
7/24/17
The
Market
Technical
The
S&P chart continues to speak for itself.
It is solidly in an uptrend; and there is nothing, technically, to make
one think anything is going to change---except the VIX (see below).
So
what could go wrong? (short):
The
long Treasury performed well last week---again suggesting that bond investors
are not concerned about a strengthening economy or a tightening Fed.
The
dollar got monkey hammered---and as above, suggesting that UUP investors are
not thinking about a strong economy or a tightening Fed.
GLD’s
chart is healing. On Friday, it finished
above its 100 day moving average; if it remains there through the close on
Tuesday, it will revert to support---and not to beat a dead horse, reflects
gold investor sentiment that a strong economy or tightening Fed is not a
concern.
This
is the longest chart I can get on the VIX.
The short and intermediate term downtrends are pretty clear. Plotting a long term downtrend is more of a
problem. Given that the intermediate and
long term trading ranges were so similar, perhaps that is the way we should
look their downtrends. Not to state the
obvious, the VIX is now at an all-time historical low. I believe that says something about the
relative valuation of equities.
Fundamental
Headlines
***overnight,
(1) the July EU Markit PMI hit a six month low, (2) the IMF lowered its 2017 US
economic growth estimate, (3) the UK trade secretary will meet his US
counterpart, (4) congress agreed on sanctions against Russia.
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Draghi’s
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Politics
Domestic
International War Against Radical
Islam
Regime
change in Saudi Arabia (medium):
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