Monday, October 2, 2017

Monday Morning Chartology

The Morning Call

10/2/17

The Market
         
    Technical

            There remains little to be said by way of analysis about this chart.  The S&P continues to move higher with little resistance between the current level and the upper boundary of its long term uptrend.



            The long Treasury has not had a good couple of weeks as the unwinding of QE and the prospects of tax reform have weighted on TLT prices.  That said, the only real technical damage that has been done is to the 100 day moving average (I know, I said earlier that it was the 200 day moving average.  My bad.)  I don’t think that this is necessarily a signal that bond investors now believe that the economy is strengthening and rates will move higher; though clearly, doubts are rising.



            A weaker TLT and stronger dollar go hand in hand if the accepted economic scenario is higher economic growth and higher interest rates.  So the improvement in UUP recently is to be expected.  However, like TLT, its technical performance is not all that convincing.  The only resistance level it has successfully challenged is its very short term downtrend and that was not that impressive.



            Of TLT, UUP and GLD, the latter has clearly experienced the most dramatic trend reversal; though to be fair, it is historically the most volatile of the three, so that is to be expected.  Still like the other two indices, it has successfully challenged only a single support level.



            The VIX is on the verge of challenging its prior low (bottom).  Complacency seems all pervasive; so the assumption has to be that the challenge will occur. 



    Fundamental

       Headlines

            ***overnight, August EU unemployment remained at 2009 levels; the September UK manufacturing PMI was below estimates; however, the Chinese manufacturing PMI was highest since 2012 and the Japanese large manufacturing index was the highest since 2007.

       Investing for Survival
   
            Stunning pictures from Saturn.

    News on Stocks in Our Portfolios

AT&T (NYSE:T) declares $0.49/share quarterly dividend, in line with previous. 

Economics

   This Week’s Data

   Other

            Kevin Walsh was just interviewed for the post of Fed Chair.  Here are some of his views (medium):

            US banks are more levered today than in 2007 (medium):

Politics

  Domestic

  International War Against Radical Islam


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