The Morning Call
12/5/17
My diagnosis has gone from viral
infection to pneumonia. I am confined to
bed. Back when I can
The
Market
Technical
The
indices (DJIA 24290, S&P 2639) had another schizophrenic day, opening up
big in initial trading but giving much of that gain for the remainder of the
day including a negative close for the S&P.
Volume was up; breadth mixed. The
bottom line remains that both of the Averages continue to trade above their 100
and 200 day moving averages and are in uptrends across all time frames---with
the assumption being that stock prices are going higher.
The VIX (11.7)
was up another 2 ¾%, closing above the lower boundary of its long term trading
range, above its 200 day moving average (reverting to support) and above its
100 day moving average (now support).
The long
Treasury was up, ending above it 100 and 200 day moving averages and the lower
boundaries of a very short term uptrend, its short term trading range and long
term uptrend.
The dollar rose,
finishing right on its 100 day moving averages (now support) and the upper boundary
of a very short term downtrend but within a short term downtrend and below its
200 day moving average (now resistance).
Gold
was off, closing below its 100 day moving average---continuing its see saw pattern
around this moving average. It remained above
its 200 moving average (now support) and in a short term uptrend.
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. The
technical assumption has to be that stocks are going higher. If you own enough cash to sleep at night, lay
back and enjoy it.
Trading in UUP,
GLD and TLT are back out of sync with themselves (sluggish economy, weak
interest rates) and with the VIX and stocks.
I remain confused and uncomfortable with the overall technical picture.
Fundamental
Headlines
One
US datapoint yesterday: October factory orders were down less than
expected. Nothing overseas.
Investor
focus was on the tax bill getting passed.
More
feedback on the senate’s piece of s**t tax bill.
And
Ed Yardini on the corporate tax cut (medium):
But
a government shutdown (12/8 drop dead date) is now starting to draw attention
(medium):
Bottom
line: the good news is that the economy is improving. The bad news, however, is that the negative consequences
of an inefficient tax bill and yet another hike in the national debt will, in
my opinion, more than offset of the benefits of the current upturn in cyclical
growth.
Update
on valuations (medium):
Investing for Survival
Notes
from an unwelcome future.
News on Stocks in Our Portfolios
Economics
This Week’s Data
October
factory orders fell 0.1% versus estimates of -0.4%.
Other
Government
debt now surpasses household debt (medium):
Politics
Domestic
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.
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