The Morning Call
7/15/19
The
Market
Technical
The S&P chart
is back to the point where it needs no analysis. The index is above both MA’s and is in uptrends
across all time frames, including a very short term uptrend. The assumption has to be that it will likely
challenge the upper boundary of its long term uptrend. There are two minor negatives to watch: (1) stocks
are very overbought, so some consolidation is likely and (2) that gap up open
two Friday’s ago is still hanging out there and needs to be closed.
The long bond rested
on Friday after a brutal Thursday. Note
that it stopped declining at an obvious minor support level (red line). Given the sharp advance from late May to early
July, some consolidation is to be expected.
So, if TLT holds that minor support level, it would be a good sign that
bond investors are still concerned about a weakening economy/in need of a
safety trade. It remains above both MA’s,
in a very short term uptrend and is still quite close to the upper boundary of
its short term trading---which if successfully challenged will reset the long
term trend to up.
The dollar was off
a nickel on Friday. However, it remains
above both MA’s, is in a short term uptrend and thirty-five cents away from a
twenty year high (blue line). In
addition, this most recent rally did not result in a second lower
high---avoiding the marking of a very short term downtrend. This is hardly indicative of a weakening
dollar.
Gold remains a
solid chart. It is above both MA’s and
in very short term, short term and intermediate term uptrends. This is a safety trade.
I wanted to give
you a sense of where the VIX is trading on a long term time frame. As you can see, it is entering the lower end
of a long term trading range, in particular, if you ignore 2017---which clearly
you can’t especially if the global central banks keep jacking up the equity
markets. But the Dow was up over 30% in ’17,
which suggests you have to buy into another big run (i.e. DJIA 35,000) in the
next twelve months.
Fundamental
Headlines
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
The
July NY Fed manufacturing index came in at 4.3 versus estimates of 2.0.
International
YoY
Chinese GDP was up 6.2%, in line; industrial production was up 6.3% versus
5.2%; retail sales up 9.8% versus 8.5%; fixed asset investment up 5.8% versus
5.6%.
Other
What
I am reading today
Raising
the American weakling.
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