The Morning Call
6/24/19
The
Market
Technical
Even though the
S&P was down slightly on Friday, it ended above the upper boundary of its
short term trading range (also its all-time high). If it remains there through the close today,
it will reset to an uptrend. Clearly,
there are no viable resistance points above 2942 until it reaches the upper
boundaries of its intermediate term and long term uptrends (3183 and 3191,
respectively). That said, it is extremely
overbought and still has last Tuesday’s gap up open that needs to be filled.
The long bond touched
its twenty year high on Thursday and then retreated on Friday. That is not all that surprising because (1) a
twenty year high is apt to offer stiff resistance and (2) TLT was well
overbought, so, it needed a rest. Longer
term, the chart looks fine. It remains
above both MA’s and in a very short term uptrend.
The dollar was
down ½% on Friday, breaking below its 100 DMA (now support; if it remains there
through the close on Tuesday, it will revert to resistance). In addition to that, very short term there
are two conflicting technical signals. First,
the price pattern since late April forms a very small head and shoulders formation,
which is a potential negative. Burt
second, you can see that big gap down open on Thursday, which needs to be
filled. That is a plus. Longer term, it remains above its 200 DMA and
in a short term uptrend.
GLD had another
good day on Friday, finishing right on the upper boundary of its intermediate
term trade range, above both MA’s and in a short term uptrend. Like everything else, it is overbought and that
upper boundary does represent decent resistance. So, I would expect some backing and filling
before it makes a serious attempt to break above that level.
The VIX was up on
Friday, pushing back above its 100 DMA voiding Wednesday’s break; so, it
remains support. This pin action is
likely the result of investors buying insurance in a Market that is severely overbought. It remains below its 200 DMA (now resistance)
and in a very short term downtrend.
Fundamental
Headlines
Additional Iranian
sanctions coming today.
Latest in US/China
trade war.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
The
Chicago Fed national activity index was reported at -0.05 versus forecasts of
+0.1
International
April
Japanese leading economic indicators came in at 95.9 versus estimates of 95.5.
Other
EU
delays sanctions against Italy.
Did
Draghi get ahead of himself in promoting rate cuts?
What
I am reading today
Quote of the day.
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