The Morning Call
6/18/18
The
Market
Technical
The
S&P held its ground last week in the face of a lot of news---not all of it
good. It is somewhat surprising that
investors retained their cool and the long bond and dollar reacted sharply to
trade war threats.
The
long Treasury spiked late last week as investors grew increasingly concerned
about a potential trade war. However, it
still has a lot of work to do to regain short term upside momentum---as its 200
day moving average and the upper boundary of its short term downtrend loom
overhead.
The
dollar held gains achieved earlier in the week and maintained longer term
upward momentum. Like bonds, last week’s
pin action was indicative of a safety trade.
After
resetting its short term trend to a trading range, GLD got hammered on huge
volume on Friday pushing it below the lower boundary of that newly reset
trading range. If it remains there
through the close tomorrow, it will reset to a downtrend. It clearly did not perform as one would
expect a safety trade.
Even
though the VIX staged a one day unsuccessful challenge of the upper boundary of
its short term downtrend, it still had a relatively calm week. Its pin action continues to suggest higher
stock prices.
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