Monday, June 3, 2019

Monday Morning Chartology


The Morning Call

6/3/19

The Market
         
    Technical

            Everyone have  a good time watching the Market fall?  The S&P has now made a double top.  There is a technical belief that there are no triple tops---meaning that either the S&P will rally and quickly push through the 2942 resistance or it is time to piss on the fire and call in the dogs.  It also reset a very short term downtrend; the 100 DMA is now resistance; and if it remains below its 200 DMA through the close on Wednesday, that will become resistance).  I have marked with purple lines the next two levels of support.

TLT continues to advance on volume as the yield curve flattens (signaling a weak economy).  It is in a short term uptrend, is above both DMA’s and is approaching a twenty year high.

The dollar was off on Friday but remains quite strong.  It is in a very short term uptrend, a short term uptrend, both MA’s are support and is approaching a thirty year high.  However, those two gap up opens continue to be unfilled.  The most likely scenario that explains strength in TLT, UUP and GLD is their role as safety trades.

GLD spiked on Friday on big volume---something you would expect on falling interest rates and a seeming flight to safety.  It has now voided the very short term downtrend and that head and shoulders formation while closing above its 100 DMA (if it remains there through the close on Tuesday, it will revert to resistance).  It remains in a short term uptrend and its 200 DMA is support.  However, on Friday it had a gap up open.

The VIX is rallying as is to be expected in a down Market.  However, its move up has been relatively subdued, indicating to me that the stock guys are still hopeful that this decline will be over soon.  Nonetheless, it is above both DMA’s and in a very short term uptrend.

    Fundamental

       Headlines

            Last week’s numbers in total were basically neutral though the primary indicators were positive (personal income [+], personal spending [+], Q4 corporate profits [-].  I rate the week a plus.  Score: in the last 190 weeks, sixty-three positive, eighty-five negative and forty-two neutral.

            This continues the somewhat erratic dataflow of the last two months, implying that while a recession may not be eminent (the warning from the flattening yield curve notwithstanding) neither is an acceleration in growth---pretty much in line with my forecast of sluggish growth.

            Overseas, the stats were horrible.  So, our own economy continues to get little help from abroad.



    News on Stocks in Our Portfolios
 
           

Economics

   This Week’s Data

      US

     International

            The May Japanese YoY manufacturing PMI was 49.8 versus expectations of 49.6---better though still in contraction.

            The May Chinese Caixin manufacturing PMI was 50.2 versus estimates of 50.0.

            The May EU manufacturing PMI was 47.7, in line and still in contraction.

            The May UK manufacturing PMI was 49.4 versus consensus of 52.0---so now contracting.

    Other

What I am reading today

           

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