The Morning Call
9/10/18
The
Market
Technical
Despite
last week’s price weakness, the S&P’s (and Dow) chart remain quite
strong. It will take a lot more damage
to change my assumption that it will challenge the upper boundary of its long
term uptrend.
The
long bond had a rough week and a really bad Friday. As you can see, it closed (1) below its 100
DMA [now support; if it remains there through the close tomorrow, it will
revert to resistance], (2) below its 200 DMA [now support; if it remains there
through the close on Wednesday, it will revert to resistance], [3] the lower
boundary of its long term uptrend [if it remains there through the close on
Thursday, the trend will reset to a trading range] and broke out of the long
pennant formation---however, it has done so briefly four times in the last
year. So while it may be slightly
premature to assume that prices are headed much lower, if there is follow
through, there will be multiple negative consequences not the least of which
will the impact on equity valuation models.
The
dollar had a see saw week, but ended up for that period and continues to
advance from the low made after it negated its very short term uptrend. UUP is strong technically and will likely
remain so until the current dollar funding problems get resolved.
GLD’s
chart remains one of the ugliest ever.
Nothing here to assume that its price won’t continue to fall.
The
VIX traded higher last week, reverting its 100 DMA to support and challenging
its 200 DMA (if it remains above it through the close on Wednesday, it will
revert to support). You can see that the
VIX has challenged its 200 DMA twice since July and failed. So this initial break is not a done deal; but
if it occurs, it would be a negative for stocks.
Fundamental
Headlines
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
The
August Chinese trade surplus with the US hit a record high; in addition, August
PPI (4.1% vs. 4.0%) and CPI (2.3% vs. 2.2%) were hotter than anticipated.
Second
quarter Japanese GDP growth was 3%, the fastest since 2016.
Other
What
I am reading today
A bank run in Argentina
(short):
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