The Morning Call
5/21/19
The
Market
Technical
The Averages (25679,
2840) were down on flat volume and mixed breadth. However, their charts are strong as (1) both
remain above their DMA’s, (2) both negated their very short term downtrends and
(3) the S&P again ended above the April 1st gap up open. The assumption has to be that they will
challenge their all-time highs. The caveat
remains that a failure to do so would set that level up as a double top. What I am waiting for now is the level of the
next high. If it is below last Thursday’s
high, it would be a sign of that double top.
The VIX was up 2%,
right on its 100 DMA (now resistance) and below its 200 DMA for a fourth day,
reverting to resistance. While it is
still in a solid very short term uptrend, the MA’s pose stronger resistance than
the very short term uptrend does support.
The long bond declined
¼ %, but finished above both MA’s, in a very short term uptrend though it is
still slightly below its newly set two year high.
The dollar was down two cents, ending just
slightly below a three year high and is now 17 cents from a ten year high. So, the chart remains quite positive though (1)
that ten year high should offer strong resistance and (2) UUP has two unfilled
gap up opens below current price levels.
GLD
dropped one cent. Its chart remains
broken---its 100 DMA is resistance; plus, it still hasn’t fulfilled the downside
objective set by that recent head and shoulders formation.
Bottom line: the
stronger/longer the indices follow through to downside, the lower the odds of
pushing above last Thursday’s high meaning the higher the odds that a double
top has been made. However, until the
Averages make a lower high, the assumption remains that another challenge of
their all-time highs is coming soon.
All the other
indicators I follow were down yesterday which has little informational value.
Monday in the
charts.
Fundamental
Headlines
One
datapoint reported yesterday: the April Chicago Fed national activity index was
disappointing.
Overseas,
April German PPI was up more than expected.
Trade
remains front and center. The day
started with major US tech firms cutting ties to Huawei, then Xi sent Trump a
message.
A
discussion on the broader implications of a trade war with China.
***overnight, good news and
bad news. Trump saves the Market again, giving
Huawei a temporary resprieve. Chinese
still not happy.
I
can’t let too much time go by without slapping the Fed around:
Why
Fed policy will ultimately be harmful to banks.
But no one cares.
Latest from Powell: ‘What, me worry?’
Counterpoint
(must read):
Bottom line: I
was surprised by the Market’s relatively tame reaction to the latest round in
the US/China trade war; but that is right in line with my statement last
Friday: the most apparent factor in
equity pricing is the Market’s belief that both Trump and the Fed will allow it
to dictate their policies. (see above)
There is no cure for ‘stupid’.
Dividends
are rising around the world.
News on Stocks in Our Portfolios
Revenue of $26.38B (+5.7%
Y/Y) beats by $40M.
Economics
This Week’s Data
US
International
Other
Japanese
economy grew in the first quarter.
The
latest on Brexit.
The
latest in the US/Iran tussle.
What
I am reading today
The
professor who beat the roulette table.
The
best kind of learning.
The
difference between a good company and a good stock.
The
best diversifier for equities.
Why
inflation is good for ’value’ stocks.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
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