The Morning Call
3/28/19
The
Market
Technical
The Averages
(DJIA 25625, S&P 2805) had a roller coaster day, with the S&P ending below
the lower boundary of its very short term uptrend (if it finishes there through
the close today, the trend will be negated) but still above the critical 2800 level
(but below the 2811/2815 level). Clearly,
this level holds a lot of gravity; given that it the S&P had tried and
failed on four prior occasions, that is not surprising. As you
know, I thought that we had lift off last Thursday, but the immediate reversal
suggests that there continues to be a bull/bear battle at the 2800/2811/2815
level. So again, follow through (in
either direction) remains is the only thing to hang a directional hat on.
As an aside, while
my attention has been focused on the S&P, I should point out the that the
Dow made a lower high last Tuesday and has been in decline ever since.
Volume declined
and breadth was mixed.
The VIX rose 3 ¼
%, leaving it between a double bottom and its 200 DMA---offering little
informational value.
The long bond spiked
again on heavy volume, ending above both MA’s, a very short term uptrend and
has now broken through all visible resistance level between its current price
(126) and its all-time high (134). That
said, last Friday’s gap open still needs to be closed.
And.
And.
The dollar rose three
cents, leaving it above the upper boundary of the November to present trading
range, above both MA’s and in a short term uptrend.
GLD was down ½ %,
but it still in a solid uptrend.
Bottom line: I
said yesterday that ‘S&P appears to have reset 2800 (2811/2815) as support’---turns
out that ‘appears’ was the operative word.
It may be about to reset; but as I also said yesterday ‘I want to see
some follow through’. I see nothing to
do but set on my hands until there is directional evidence.
TLT, GLD and UUP
continue to point to lower interest rates/a weaker economy.
Wednesday
in the charts.
Fundamental
Headlines
Yesterday’s
economic data was slightly positive: weekly mortgage and purchase applications
were up, the Q4 trade deficit deteriorated though the January figure improved.
Overseas,
the January/February Chinese YoY industrial profits declined dramatically.
Fed
policy remains front and center along with what is happening with the yield curve
(see TLT above). Thrown into the mix is
now the growing controversy surrounding Trump’s new Fed nominee, Stephen Moore.
More
on the Fed decision. This from
supporter, sort of.
This
one, not so much. A must read from Jeffrey
Snider.
And
Moore.
And Moore.
Bottom
line: it seems like the major questions that I have been raising on monetary
policy, the economy and the bond market are getting closer to being answered;
how they get answered will likely determine equity price direction over the
next year. I have been anticipating a
showdown on these issues far sooner than has occurred. I await the resolution.
News on Stocks in Our Portfolios
Revenue of $1.07B (+14.3%
Y/Y) in-line.
Revenue of $10.45B (+5.4%
Y/Y) beats by $150M.
Accenture (NYSE:ACN) declares $1.46 semi-annual
dividend, in line with previous.
Economics
This Week’s Data
US
Weekly
jobless claims fell 13,000 versus estimates of a 7,000 increase.
Q4
2018 GDP growth was +2.2% versus forecasts of +2.4%; the price deflator was
+1.9% versus +1.8%; corporate profits were flat versus a 3.5% advance in Q3.
Q4
trade deficit was $134.4 billion versus expectations of $130.0 billion.
International
The Q3 EU business confidence index
came in at .53 versus projections of .66; the industrial sentiment index was
-1.7 versus -.9; the consumer confidence index was -7.2, in line; economic
sentiment indicator was 105.5 versus 105.9.
Other
Median
household income declined in February.
***overnight,
developments on Brexit.
Turkey’s problems
continue,
What
I am reading today
Nothing is safe.
Quote
of the day.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
No comments:
Post a Comment