The Morning Call
8/9/18
The
Market
Technical
The Averages
(DJIA 25583, S&P 2857) were off slightly; again, on lower volume. Breadth weakened. They remain strong technically. In addition, the
VIX is below the lower boundary of its short term trading range for a second
day---a plus for stocks (if it remains there through the close today, it will
reset to a downtrend). The
only bit of cognitive dissonance is the Dow’s 100 DMA which remains right on
its 200 DMA and moving lower.
The major
technical story continues to be the pin action of TLT (increase in interest
rates). Yesterday, it ended below (1) its
100 DMA, reverting to resistance and (2) the lower boundary of its long term
uptrend [if it remains there through the close on Friday, it will reset to a
trading range].
The dollar fell another three
cents but remains in a strong technical position and appears to be confirming a
move to higher rates. GLD was up but is
in a solid downtrend which also points towards higher rates.
Bottom
line: the Averages remain quite strong
technically speaking. The assumption remains that they are going to challenge
their all-time highs with the S&P only points away.
TLT’s
100 DMA reverted to resistance; and, far more importantly, it continues its challenge
of the lower boundary of its long term uptrend.
If successful, its pin action has potentially important negative
fundamental as well as technical implications.
The dollar and GLD are pointing towards higher interest rates.
Yesterday in the charts.
Fundamental
Headlines
The
sole economic release yesterday was weekly mortgage and purchase applications
which were down.
Bottom
line: the higher stock prices go, the more overvalued they become. Cash is an important asset to own in this
environment.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Weekly
jobless claims fell 6,000 versus expectations of up 2,000.
July
PPI was flat versus estimates of up 0.3%; ex food and energy, it was up 0.1%
versus consensus of up 0.3%.
International
July
Chinese PPI and CPI were hotter than forecast.
June
Japanese machine orders fell 8.8% versus projections of -1.0%.
Other
With all the
concern over soybean exports to China, it appears our farmers are selling them
to someone else (short):
Younger doctors
now embracing single-payer healthcare (medium):
The lessons that
the Fed ignores (medium):
What
I am reading today
Update
on crypto currency markets (medium):
How to blend work and retirement
(medium):
China tests hypersonic missile
(medium):
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for Survival’s website (http://investingforsurvival.com/home)
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