The Morning Call
10/15/18
The
Market
Technical
Last
week, the S&P negated its very short term uptrend and reverted its 100 DMA
from support to resistance. Most
important, it is now in a challenge of its 200 DMA. It broke below this support level on
Thursday---a support level, by the way, that has been challenged multiple times
over the last two years and held. On
Friday, the S&P closed right on that MA, which in my time and distance
discipline, stops but does not reset the clock.
In other words, if it closes below the 200 DMA today, it will restart the
clock (which means Monday will be the second day of the break); if it closes
above the MA, the break will be voided. So
on a short term basis, the S&P is at a critical technical level. Today’s pin action will tell us a lot. Incidentally, the Dow closed above its 200
DMA, negating Thursday’s break which is a mildly positive indicator for what
the S&P might do today.
The
long bond had one good day (Thursday) last week in which its role as a safety
trade seemed to kick in. However, it was
unable to rise above the lower boundary of its former intermediate term trading
range, lending strength to the new downtrend.
It is also it remains below both moving averages, in a short term
downtrend and in a newly reset long term trading range. In short, it looks like more downside in
prices.
The
dollar sold off last week though it was up on Friday. It remains strong technically; but I was a
bit mystified by its decline on Wednesday and Thursday since it is usually
associated with a safety trade.
GLD
exploded upward on Thursday on huge volume, challenging a six month losing
streak. If it manages to stay above the
upper boundary of its short term downtrend on the close today, it will reset to
a trading range. While it might be
relinquishing the title of ‘ugliest chart on the block’, it is still no time to
get jiggy.
The
VIX soared last week closing above both moving averages and resetting its short
term trend from a trading range to an uptrend.
Not a good sign for stocks.
Fundamental
Headlines
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
September
retail sales rose 0.1% versus expectations of up 0.6%; ex autos, they were -0.1%
versus estimates of +0.4%
The
October NY Fed manufacturing index came in at 21.1 versus consensus of 18.8.
International
Other
Update
on the used car market.
What
I am reading today
Your
work is the only thing that matters.
Monday morning humor.
The
tightening alliance between Russia and India.
Problems
in the Chinese housing market.
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