The Morning Call
3/4/19
The
Market
Technical
In a volatile day in
which the S&P see sawed above and below 2800, it closed slightly above that
level. Certainly, that is a positive
sign. But it must hold above it to
really be a plus. Follow through.
The long bond got hammered
over the last two weeks. It voided its
very short term uptrend, traded below an important support level on Friday and
is now within a point of its 200 DMA.
The question is, what is behind this move: a strengthening economy or
rising inflation or both? If the dollar continues
to rally and GLD declines as they did on Friday, that would suggest a stronger
economy.
On Friday, the dollar
took back most of its losses from earlier in the week. I marked (green line) the prior lower
high. As you can see, UUP closed very
close to that level. If it trades above
it, that would remove the only negative in this chart.
Like TLT, gold was
pounded on Friday on heavy volume, ending below a support level (purple line)
and the lower boundary its very short term uptrend (if it closes there today,
the trend will be voided). It is normal
for GLD to decline on rising interest rates and a strong dollar.
The VIX continues to
move lower, a good sign for equities.
The decline on Friday took it to its prior low. If it closes below that level, it will
re-establish a very short term downtrend.
Fundamental
Headlines
How
QT ends.
US/China trade headlines.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
January EU PPI was
up 0.4% versus estimates of +0.3%.
The
February UK construction PMI came in at 49.5 versus consensus of 50.4.
Other
Latest on Brexit.
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