The Morning Call
3/19/19
The
Market
Technical
The Averages
(DJIA 25914, S&P 2832) had another good day. S&P closed well above the 2800 (and even
the 2811/2815) quad top---marking a breakout in my work (and if it closes above
2815 today, it will also signify a break of the 2811/2815 top crowd). If it proves to be a break, then next stop is
the indices’ all-time highs (26917/2942)
Volume fell (but
that is not surprising following Friday’s quad expirations) and breadth improved.
The VIX rose 1 ¾
%, but still finished below the late February/early March double bottom; so, it
appears headed for the lower boundary of its short term trading range.
The long bond was
off fractionally. It remains in the
upper tier of the trading range defined by a quad top and a double bottom. The chart remains reasonably strong.
The dollar declined
three cents, closing below the upper boundary of the November to present
trading range and back below the lower boundary of a recently established very
short term uptrend (if it remains there through the close today, that trend
will be voided). Nonetheless, the chart
remains strong, ending above both MA’s and within a short term uptrend.
GLD advanced,
finishing above both MA’s and in a short term uptrend.
Bottom line: the
S&P ended above 2800/2811/2815. A close there today opens the way for a
challenge of their all-time highs and, perhaps, the upper boundaries of the
long term uptrends.
TLT and GLD are
pointing at a weak economy/easy Fed, the latter likely being the reason equity investors
have been jiggy. However, the price
action in the dollar doesn’t exactly fit the weak economy/easy Fed scenario,
unless it is being viewed as a safety trade.
So, I am a bit confused about the messages being sent by our indicators.
Monday in the charts.
Fundamental
Headlines
One
minor stat was reported yesterday: the March housing market index was in line
with estimates.
Overseas, January
Japanese industrial production fell but slightly less than anticipated;
however, capacity utilization was abysmal.
The January EU trade balance was much better than expected.
The
FOMC meets this week and will likely be the news highlight. Given the recent Fed ‘patience’ narrative, it
would be surprising for the statement following the meeting to be otherwise.
Bill
Dudley comments.
The
Fed needs to buy some recession insurance.
How useful is
the Fed’s dot plot?
The Fed can’t
fix credit exhaustion.
Bottom line: the
bad news is that the uncertainties regarding US/China trade and Brexit
escalated Sunday and Monday. The good
news is that the Fed is expected to remain dovish and the S&P hasn’t hesitated
after blowing through the 2800 resistance level. It appears that the good news wins.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
The
March housing market index came in at 62, in line.
International
January
EU construction output declined 0.7% versus estimates of a 2.1% increase.
March
EU economic sentiment index was reported at -2.5 versus forecasts of -18.7.
Other
Is
government debt really equity?
UK
Commons Speaker rejects May’s latest Brexit vote.
https://www.zerohedge.com/news/2019-03-18/sterling-slides-uk-speaker-blocks-mays-unaltered-deal-vote
What
I am reading today
Why
are boomers so broke?
Valuation
determines return (must read).
Seven retirement planning
mistakes to avoid.
The three rebel queens of Egypt.
Will North Korea resume nuclear
tests?
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for Survival’s website (http://investingforsurvival.com/home)
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