The Morning Call
6/11/18
The
Market
Technical
The
S&P has broken free of its 100 day moving average and is now developing a
very short term uptrend. The next
visible resistance is at its all-time high which it seems likely to
challenge. Very short term, it and the
Dow are moving into overbought territory.
The
long bond continues to lose some momentum after the late May price spike (drop
in yields). The trend is still towards
lower yields/higher prices though clearly TLT is near two crucial support
levels (100 day moving average, lower boundary of its long term uptrend). If the Fed continues to raise rates and other
central banks join in, then the uptrend will almost certainly be challenged.
While
the dollar voided a very short term uptrend last week, it remains in a steeply
upward trajectory, finishing well above its 100 and 200 day moving averages and
the upper boundary of its short term uptrend---indicating a strong US economy
and higher interest rates.
GLD
continues to go nowhere. It remains
below its 100 and 200 day moving averages but is now challenging the upper
boundary of its short term downtrend by virtue of trading sideways as the short
term trend goes lower. If it remains
above the upper boundary of its short term downtrend through the close
tomorrow, it will reset to a trading range.
Momentum
in the VIX remains down, suggesting higher stock prices. However, historically, it is at a level at
which institutional investors start buying it as portfolio insurance.
Fundamental
Headlines
***overnight,
the Italian PM said that Italy would not seek to leave the EU; the US refused
to sign the joint communique following the G7 meeting.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
April
UK industrial production was down 0.8% versus consensus of up 0.1%; its trade
deficit grew from L11.4 billion to L14.0 billion.
Other
Growth
in Chinese credit is slowing (medium):
What
I am reading today
Don’t buy the Pentagon’s
argument for staying in Afghanistan (medium):
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