The Morning Call
3/15/19
The
Market
Technical
The Averages
(DJIA 25709, S&P 2808) had a mixed day (Dow up, S&P down), with the
S&P again closing above the 2800 quad top (if you read the link I included in
yesterday’s Morning Call, you know that a number of technicians are calling the
quad top at 2811-2815). It needs to
remain there through today’s close to mark a breakout. If successful, it likely portends much higher
prices.
Spoiling the fun
again, volume declined and breadth only marginally improved.
The VIX rose nine
cents, ending back above the late February/early March double bottom.
The long bond
was down ¾ % on good volume, continuing its retreat from a quad top---not a
promising development if you expect lower interest rates. Still, the chart remains strong.
The dollar was
up eight cents, finishing right on the upper boundary of the November to
present trading range and above the lower boundary of a recently established
very short term uptrend. The chart
remains strong.
GLD plunged 1 ¼ %,
setting a second lower high and heading back toward a minor support level (double
bottom). It remains above both MA’s.
Bottom line: the
S&P is challenging a major (quad top) resistance level, the successful
completion of which would point to a move to all-time highs. As a word on caution, (1) this week is quad
witching and that has historically had a positive impact on stocks prices and
(2) as I noted above, several technicians believe the quad top is better marked
at the 2811-2815 level.
TLT, GLD and now
UUP are caught between strong support and resistance levels; if the S&P’s
challenge is successful, it would likely mean these indicators would begin
breaking out of their own trading ranges. That said, their pin action yesterday pointed
at higher interest rates.
Thursday
in the charts.
Fundamental
Headlines
Yesterday’s
economic numbers were all bad: weekly jobless claims, February import/export
prices and January new home sales disappointed.
China
did a data dump that was weighed to the positive: January industrial production
was below estimates but retail sales and fixed asset investment were above.
Bottom
line: economic data aside, investors had to digest a hiccup in the US/China
trade talks along with the Brexit soap opera, leaving the outcome of both uncertain. They yawned.
Brexit delayed;
no second referendum.
It
looks like that either bad news simply isn’t bad news or all the bad news is in
prices or it may be that everyone is watching for a resolution of the ~S&P2800
challenge.
QE
V?
***overnight,
the BOJ left interest rates unchanged.
It also pointed to a weakening trade picture.
This
is a must read article on stock buybacks.
News on Stocks in Our Portfolios
Revenue of $9.61B (-0.7% Y/Y) beats by $20M.
Oracle (NYSE:ORCL) declares $0.24/share
quarterly dividend, 26.3% increase from prior dividend of $0.19.
Economics
This Week’s Data
US
January
new home sales fell 6.9% versus expectations of -0.9%.
International
February
EU core inflation was up 0.3%, in line.
Other
C&I
loans enter danger zone (must read):
What
I am reading today
How
El Ninos and La Ninas impact atmospheric CO2.
Student loans---the black
plague.
Twenty of the craziest investment
facts ever.
Counterintuitive competitive advantage.
North Korea mulls suspending nuclear
talks.
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for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
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