The Morning Call
4/2/18
The
Market
Technical
We
are in the midst of some S&P cognitive dissonance. While its major uptrends remain intact
(though the Dow has reset its short term trend from up to a trading
range). However, it successfully challenged
its 100 day moving average and is now in a short term downtrend. The bottom line is that it still has a lot of
support; so there is going to have to be some serious downside price action
before I question whether or not the S&P has hit its high and is rolling
over.
The
long Treasury continues its six week roll to the upside (very short term
uptrend). While it hasn’t yet challenged
any serious resistance levels (moving averages and trend lines), it is nearing
its 100 day moving average. Whether it
is successful or not should tell something about bond investors’ outlook for
the future (of interest rates).
The
dollar is not really reacting to the dramatic moves in the stock and bond
markets, staying in a two month holding pattern. That said the technical picture for UUP is
negative, having closed below its 100 and 200 day moving averages and in an
intermediate term downtrend. I admit
that I am baffled by this pin action.
The
bad news is that this week GLD gave up all of last week’s stellar gains. What is so confusing (I know I have said that
a lot of times of late) is that this is exactly the opposite of what
traditionally occurs when interest rates drop (bond prices rise). The good news is that GLD held above the
lower boundary of its short term uptrend, leaving the momentum to the upside.
As
you might expect, the VIX was down on Friday.
It remained in a very short term uptrend and above its 100 and 200 day
moving averages and the lower boundary of its short term trading
range---suggesting continued volatility.
However, it was unable to successfully challenge its prior lower high. I think that this all means that investors
remain fearful but are not panicking.
Fundamental
Headlines
China
releases details of the tariffs being imposed on US goods (short):
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
Other
What
I am reading today
The most dangerous
assumption made by baby boomers (medium):
Trump is pulling US out of Syria
(thank God)
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