The Morning Call
11/5/18
The
Market
Technical
The
good news is that the S&P was able to avoid a break of its short term
uptrend and to negate its very short term downtrend. The bad news is that it couldn’t mount a
challenge of its 200 DMA, which has been a significant technical level over the
last two years (I know, I mentioned it again).
It seems like a break of either the lower boundary of its short term
uptrend or the 200 DMA will be a good indication of a further directional move.
The
long Treasury got pounded on Friday, resetting a very short term
downtrend. With TLT trading below both
moving averages and in a short term downtrend, it seems the bond boys believe
rates are going higher.
The
dollar worked its way higher last week, finishing above its August high. Its chart shows good strength which I have to
assume continues, likely propelled, at least partially, by the dollar funding
problem.
GLD
continues to struggle. On the one hand,
it has been able to hold above its 100 DMA; on the other hand, it negated a
very short term uptrend. What is a bit
confusing is that lower bond prices (higher interest rates) and a rising dollar
should be bad for gold. Of course, maybe
the hammering it has taken over the last seven months was anticipating what is
now occurring with rates and the dollar.
Whatever is happening, it is confusing me.
VIX
sold off last week, bouncing off the upper boundary of its short term uptrend
for a second time. But it didn’t have
the same volatility as it has in past periods of violent swings like we have
been going through---suggesting a subdued level of fear.
Fundamental
Headlines
News on Stocks in Our Portfolios
Revenue of $76.6B (+25.4%
Y/Y) beats by $920M.
Economics
This Week’s Data
US
International
The
October Chinese Markit services PMI was reported at 50.8 versus estimates of
52.8; the Caixin composite PMI was 50.5 versus September’s reading of 52.1.
The
October Japanese Markit services PMI came in at 52.4 versus expectations of
50.2; the composite PMI was 52.5 versus 50.7 recorded in September.
Other
Shipping
rates are plunging.
Key
address from China’s Xi.
Iranian
sanctions pose risk to dollar supremacy.
The
latest from Nassim Taleb.
What
I am reading today
Quote of the day.
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