The Morning Call
6/14/19
The
Market
Technical
The Averages (26106,
2891) bounced yesterday, with the DJIA ending above the minor resistance level
and the S&P right on it. Volume was
down even more while breadth improved.
Both ended above their 100 and 200 DMA’s (now support).
VIX was down another ½%. It finished above its 100 DMA (now support),
below its 200 DMA (now resistance) and below the lower boundary of its very
short term uptrend for a second day, voiding that trend. However,
as I noted yesterday, the close below that boundary was more a function of the
steep incline of the trend line than of the small price decline.
TLT advanced 3/8%,
finishing above both MA’s (now support) and in a very short term uptrend.
US
Treasury downgrades its outlook for inflation.
The dollar was up two
cents, remaining in a short term uptrend and above both moving averages (now support).
GLD rose 5/8%,
closing within a short term uptrend, above both MA’s (now support) and remains
near the upper boundary of its intermediate term trading range.
Bottom line: yesterday’s
pin action lends credence to the notion that the indices have been digesting their
strong June advance rather than being really stymied by a minor resistance
level. My assumption remains that upward
momentum has not been broken and a move higher is likely.
However, I repeat the caveat that low volume,
relatively weak breadth and a VIX that is signalling extreme complacency are
reasons to doubt that scenario. In
addition, the pin action in the bond, dollar and gold markets again pointed at
their function as a safety trade.
Thursday
in the charts.
Fundamental
Headlines
Yesterday’s
numbers were disappointing: weekly jobless claims fell less than anticipated while
May import and export prices declined more than expected. Nothing from overseas.
New survey shows 69%
of US CFO’s expect a recession by the end of 2020.
The
lead headline of the day was the attacks on tankers near the Straits of
Hormuz. I leave the analysis of implications
of this incident to the foreign policy experts, except to state the
obvious---armed conflict and/or the severe curtailment of oil supplies would
likely be a negative for the global economy and corporate earnings (except, of
course, for the energy complex).
Latest on the attacks
on tankers in the Gulf of Oman.
Bottom line: war in
the Middle East. Buy, buy, buy. As long as the Fed has the Market’s back, it
will remain the key factor in equity pricing.
Forget that Averages are a short hair away from their all-time highs and
valuations are rich. For me, that means
caution, taking profits when given the opportunity and keeping alert for values
in Market sectors that have been trashed.
Projected quarterly
dividends through Q2 2020.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
May
retail sales grew 0.5% versus estimates of +0.6%; ex autos, they were +0.5%
versus +0.3%.
International
May Chinese YoY
industrial output was up 5.0% versus expectations of up 5.4%; fixed asset
investment was up 5.6% versus 6.1%; retail sales were +8.6% versus +8.1%.
April Japanese
industrial production increased 0.6%, in line.
Other
Trade
worries are hurting economic optimism.
What
I am reading today
Who should consider a
reverse mortgage and who shouldn’t.
The math on social security isn’t
getting any better.
More art than science.
Overcoming frustration.
What we believe and what is.
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for Survival’s website (http://investingforsurvival.com/home)
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