Investing for Survival: Monday Morning Chartology

Monday, August 19, 2019

Monday Morning Chartology

The Morning Call

8/19/19

The Market

Technical

The S&P has been consolidating since late July. It is now between its 100 DMA and 200 DMA and between the upper boundary of a developing very short term downtrend and the August 5^th low which it has bounced off of twice. So, there are multiple levels that will provide directional information.

On a long term basis, TLT remains in uptrends across all timeframes and is above both MA’s. But shorter term, it has gotten overextended. Plus, it has two gap up opens that need be filled, neither of which would call into question the long bonds upward momentum. Barring a financial crisis, some backing and filling would not be surprising.

The dollar’s performance remains strong, ending above both MA’s and within short and long term uptrends. However, it has not gotten overextended like TLT and GLD. So, there is less technical pressure for a correction; although it still has a one gap up open that needs to be filled.

Despite being off slightly on Friday, GLD is also getting overextended; though like TLT, there is no sign of a decrease in GLD’s upward momentum. The only negative is all those gap up opens further down. But also, like TLT, barring a crisis of some sort, expect some short term loss of momentum. However, unlike TLT, GLD is nowhere near its all-time high.

The VIX followed the see saw Market last week. Note that it made a higher high and remained within a developing very short term uptrend---giving a slightly bias to the stock market