The Morning Call
10/17/17
The
Market
Technical
The indices (DJIA
22956, S&P 2557) were up again. Volume was down and breadth strong. Both remain above their 100 and 200 day
moving averages and are in uptrends across all time frames.
The VIX (9.9) was
up 3%, ending below the upper boundaries of its very short term and short term
downtrends, below its 100 and 200 day moving averages, back above the lower
boundary of its long term trading range.
In addition, it has now made a second higher low, though the very short
term downtrend carries more technical weight.
The long
Treasury declined $0.09, but finished back above its 100 day moving average,
above its 200 day moving average (support) and the lower boundaries of its
short term trading range and its long term uptrend.
The dollar rose
slightly, but remained in its short term downtrend and below its 100 and 200
day moving averages. Last week, it is successfully challenged a developing very
short term uptrend.
GLD fell, ending
above its 100 and 200 day moving averages (support) and the lower boundary of a
short term uptrend. However, last week,
it successfully challenged a developing very short term downtrend.
Bottom line: long term, the indices remain
strong viz a viz their moving averages and uptrends across all timeframes.
Short term, they are above the resistance level marked by their August highs,
meaning that there is no resistance between current price levels and the upper
boundaries of the Averages long term uptrends.
Trading in TLT,
UUP and GLD was inconsistent.
I remain uncomfortable
with the overall technical picture.
Odds
of John Taylor as Fed chair are rising (medium):
Odds
of a correction anytime soon (medium):
Fundamental
Headlines
There
was a single US economic datapoint released yesterday: the October NY Fed manufacturing
index was a blow out number on the upside.
Overseas,
the September Chinese CPI was in line while PPI was hotter than anticipated.
***overnight,
the September UK inflation rate hit a five year high; October German investor
sentiment rose slightly; September EU car sales declined.
We
have reached the point that investors are focused almost solely on the Market. There was some specific news on individual
companies and lots of news that in different times would have had a higher
profile: North Korean threats of nuclear war, Trump declining to certify the
Iranian nuclear deal, Iraqi forces capturing Kirkuk and rising speculation that
the ECB will raise rates soon. But
everything now is playing second fiddle to stock prices.
Investors
are ignoring the evidence (medium):
Bottom
line: investor psychology is now interpreting any news as good news and
ignoring any potential bad news as irrelevant.
How long that condition exists, I have no idea. But as long as it does, stocks are going
higher. And to the extent that there is
any consolidation, backing and filling will be modest.
As
an investor, I would rather take the risk of selling a stock that has hit its
Sell Half Range and missing some additional upside versus the risk of holding
on and not being the first out of the door.
The
cost of delusion (medium and a must read):
Should
we be worried about earnings growth? (medium):
Who
sold all those bonds to the ECB? (medium):
Risk
management for all Markets (medium):
My thought for
the day: the planning fallacy is our tendency to underestimate the time, costs
and risks of future actions and at the same time to overestimate the benefits
thereof. It's at least partly why we underestimate the likelihood of bad
results. It's why we think it won't take us as long to accomplish something as
it does. It's why projects tend to cost more than we expect. It's why the
results we achieve aren't nearly as good as we expect and why they are so often
disastrous.
Investing for Survival
Investing
in ETF’s for the long term.
http://www.investors.com/etfs-and-funds/etfs/retirement-investing-strategies-etfs-for-the-long-term/
News on Stocks in Our Portfolios
Revenue of $19.65B (+10.3% Y/Y) beats by $370M.
Economics
This Week’s Data
The
October NY Fed manufacturing index came in at 30.2 versus expectations of 20.0.
September
US import prices rose 0.7% versus forecasts of +0.5%; export prices increased
0.8% versus estimates of +0.4%.
Other
NAFTA
talks heat up (medium):
Politics
Domestic
International War Against Radical
Islam
The
bogus Iranian threat (medium):
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for Survival’s website (http://investingforsurvival.com/home)
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