The Morning Call
1/16/18
The
Market
Technical
The
refrain is the same: up, up and
away. The assumption is that there is
more to come.
Euphoriameter (medium):
The
decline in TLT (higher rates) accelerated following the low PPI number (suggesting
the Fed could be more aggressive raising rates); but that proved to be a one
day phenomena. However, that leaves the long Treasury in sort of a no
man’s land---in a very short term downtrend and below its 100 day moving
average but above its 200 day moving average and the lower boundaries of its
short term trading and long term uptrend.
In other words, basically directionless; so I await a move breaking one
of these two barriers.
Japanese
purchases of US Treasuries tumble (medium):
China
takes another shot in anticipation of a trade war with the US (medium):
The
dollar experienced a minor uptick when the PPI stat was released (higher US
rates usually means a stronger dollar). But
then it was hammered the rest of the week---which suggests that currency investors
are betting on a continuation of the Fed’s accommodative policy. Clearly, it is supporting the equity
theme. As you can see, it is now
approaching the lower boundary of its long term trading range. A break of that boundary would suggest more
serious downside price action.
GLD
was hardly phased by the threat of higher interest rates. It beat a one day retreat then continued a
strong very short term performance.
This
VIX chart is not what you would expect to see at a time that the Market is on a
moon shot. It looks like it has
uncoupled for the traditional inverse relationship with equities. I don’t think that is necessarily a bad thing
for stocks, directionally speaking; but it certainly suggests that 2018 will be
a much more volatile year than 2017---that is the moves in both directions are likely
to be more pronounced.
Fundamental
Headlines
Subscriber Alert
Microsoft
(MSFT-$89) has traded into its Sell Half Range.
According, at the Market open today, the Aggressive Growth Portfolio
will Sell one half of its position.
Economics
This Week’s Data
US
The
January NY Fed manufacturing index was reported at 17.7 versus expectations of
19; however, the December number was revised upward.
International
December
UK CPI was in line.
Other
Update
on big four economic indicators (medium):
The
Fed paying banks not to lend (medium):
How
much economists don’t know (medium):
David
Stockman on the real s**thole economy (medium):
What
I am reading today
What
really happened in Iran (short):
Calculating
your paycheck after the tax cuts kick in (medium):
Doing nothing.
Outlook
for oil production in 2018 (short):
Quote
of the day (short):
More
on the modernization drive in Saudi Arabia (medium):
US
inequality chart book (short):
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