The Morning Call
3/12/19
The
Market
Technical
The Averages
(DJIA 25650, S&P 2783) recouped last Thursday/Friday’s decline plus some. Intraday, the Dow unsuccessfully challenged its
200 DMA; while the S&P moved back above its 200 DMA, voiding Friday’s
break. Last Friday, I noted that ‘the
200 DMA usually presents decent support/resistance’. It appears that it has
done so again; so, now we have an easily identifiable support level to go with
the S&P 2800 quad top resistance.
Volume was up;
breadth was mixed, at best---which really doesn’t match up with a strong up day
in prices.
The VIX declined
10 ¾ %, falling away from its 200 DMA; but it remains above the late
February/early March double bottom---again trading in almost perfect in inverse
unison with the S&P.
The long bond
was down. But the 100 DMA continued to rise above its 200 DMA, remaining above
the support level that has now become a double bottom. It remains in a range
bounded by a double bottom and a triple top (sound familiar?).
The dollar dropped
six cents, but still finished above the upper boundary of the November to
present trading range and set a very short term uptrend. The only negative in this chart is last
Thursday’s gap open which needs to be closed.
GLD was down
slightly, but closed above a second minor support level (now a double bottom) and
above both MA’s.
Bottom line: the
S&P as well as all the VIX, TLT and GLD is now caught between strong
support and resistance levels. That
suggests to me that there will be sideways trading across all markets over the
near term.
Monday
in the charts.
Fundamental
Headlines
Yesterday’s
economic data was mixed: December business inventories/sales were disappointing
while January retail sales were quite positive.
Overseas,
the German government lowered its 2019 economic growth forecast.
And it wasn’t
the only downgrade:
Atlanta Fed cuts Q1 economic
growth forecast to 0.2%.
Economists cut global growth
forecast.
The
global economy is the weakest since the financial crisis.
Morgan Stanley
sees the economic growth rate bottoming in the first quarter.
If
you missed it, Powell did an interview on 60 Minutes Sunday evening.
Reactions:
And:
Last
but not least: Tuesday morning humor---the Donald’s FY2020 budget: increased
defense spending (we got to keep those $3,000 wrench makers happy), lower
domestic spending (new bridges, airports, fugitabotit), assume 3% annual economic
growth (wet dream), $8 billion for a border wall (a sure winner in the house),
balance the budget by 2034 (I will be dead by then).
More:
Bottom
line: it looks increasingly like the first quarter is going to be a bust, with the
consensus among nongovernment economists expecting further disappointments in Q2
and Q3. Investors don’t seem worried.
The Trump budget
is a joke. But what bothers me is that
there is no attempt at trimming overall spending which means that whatever your
and my money gets spent on, we are staring at trillion dollar deficits as far
as the eye can see. Investors don’t seem
worried.
But what do you
think investors will do if the Fed raises the Fed Funds rate another 0.25% in
March?
S&P
dividend payers.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
December
business inventories rose 0.6%, in line; however, sales declined 1%.
The
February small business optimism index came in at 101.7 versus estimates of
102.0.
February
CPI was up 0.2%, in line; ex food and energy, it was up 0.1% versus forecasts
of up 0.2%.
International
The
German government lowered its 2019 economic growth forecast to 1.0% from the
prior 1.8%.
Other
Is
market concentration hurting the US economy?
The
monetary duration dilemma.
May
cuts another ‘deal’ with EU on Brexit only have her AG diss the plan.
What
I am reading today
The
politics of semantics.
Is
war with Iran on the horizon?
Reforming bank executive
compensation.
Boring is the best strategy in
investing.
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for Survival’s website (http://investingforsurvival.com/home)
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