The Morning Call
10/1/18
The
Market
Technical
Again, this picture is worth a
1000 words. There is nothing to
add. The S&P is highly likely to
challenge its all-time high.
When
TLT broke below the lower boundary of its long term uptrend, my assumption was that
(1) from a technical standpoint, there would be considerably more downside
based on the length of the pennant formation out of which it also broke and (2)
fundamentally, TLT was being driven lower because of a tighter Fed [higher rates
and less money]. The bounce in mid-September
clearly called that assumption into question.
However, I am not giving up on that thesis just yet since the original
reasons for the move down still seem to be intact.
The dollar has broken
decisively out of its very short term downtrend, seemingly regaining its former
strength. To re-establish the uptrend in
needs to successfully challenge its August high. As you know, I think UUP will continue to
rise as long as the dollar funding problem plagues emerging markets.
On Friday, GLD recouped its
Thursday loss, putting it back into a very short term trading range. Maybe gold is building a bottom. On the other hand, this remains an ugly
chart.
The
VIX is still somewhat out of sync with stocks---dropping 2 ¼ % on basically a
flat day seems a bit more than usual.
That said, it is trading at the lower end of its short term trading
range---a plus for equities.
Fundamental
Headlines
JP
Morgan on the US/China trade dispute.
I
mentioned the growing problem in the US ‘shadow banking’ industry in Saturday’s
Closing Bell but didn’t expect headlines immediately. This morning, India nationalized its largest
shadow bank.
And China is s experiencing
rising defaults.
Canada and US agree to new
US/Mexico/Canada trade deal.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
The
September EU manufacturing PMI was 53.2 versus estimates of 53.3.
The
September Chinese manufacturing PMI was 50.8 versus expectations of 51.2 while the
Caixin [small, privately held companies] manufacturing PMI slowed, fixed
investment declined; but the services PMI and retail sales were better than
consensus and industrial output was flat.
Other
Is
the dollar losing is global status?
What
I am reading today
Making better investment
decisions.
Pictures and a video from the
surface of an asteroid.
The fragility of Middle East
alliances.
https://www.zerohedge.com/news/2018-09-29/fragility-middle-east-alliances-becomes-ever-more-apparent
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