The Morning Call
8/21/19
The
Market
Technical
The Averages (22962,
2900) were off yesterday. Volume was down,
as usual; breadth deteriorated. The
Dow ended below its 100 DMA (now resistance), above its 200 DMA (now support)
and above the upper boundary of a very short term downtrend for the second day,
voiding that trend. The S&P ended back below its 100 DMA once again. This is the seventh time it has crossed this
level in the last twelve trading days. Clearly, the recent see saw action is
not over. So, I continue to withhold a
support/resistance call. It finished above
its 200 DMA (now support) but back below the upper boundary of a very short
term downtrend, negating Monday’s break.
The VIX rose 3 5/8
½ %, finishing above both MA’s (now support).
However, it finished below the lower boundary of its very short term uptrend
for a second day voiding that trend.
The long bond was up
1 %, remaining above both MA’s and in uptrends across all timeframes. It continues to be overextended.
The dollar fell ¼ %,
ending in short and long term uptrends and above both MA’s. However, it bounced off its July 31st
high, creating a minor resistance level..
Gold advance ¾ %,
closing within very short term and short term uptrends and above both
MA’s. However, it still has the gap up open
from two weeks ago which needs to be closed.
And like TLT, it remains overbought.
Bottom line: long term, the
Averages are in uptrends across all timeframes; so, the assumption is that they
will continue to advance. Short term, they
failed to push through their 100 DMA and are now out of sync on the upper boundaries
of their very short term downtrends. So,
they remain in the congestion range dating back to August 5th.
The pin action in the long bond, the
dollar and gold continues to point at the need for a safety trade.
Tuesday in the
charts.
https://www.zerohedge.com/news/2019-08-20/bonds-bullion-bid-fading-stimulus-hype-sinks-stocks-dollar
Fundamental
Headlines
One minor US
datapoint released yesterday: month to date retail chain store sales grow was less
negative than last week.
Overseas,
June EU construction output and July German PPI were disappointing while the August
UK industrial orders index was down but less than expected.
Business cycle
risk report.
Recession
predictions.
Bottom line: the
minutes of the last FOMC meeting will be released today. Investors’ take on that narrative could add
to or temper what seems to be an increasingly schizophrenic Market/Fed relationship.
Expected Q3 and Q4
S&P earnings.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Month
to date retail chain store sales grow rate declined but less than in the prior
week.
Weekly
mortgage applications fell 0.9% while purchase applications were off 4.0%.
International
Other
Math
challenged politicians.
Ground zero for the next
recession.
What
I am reading today
The search for Amelia
Earhart’s airplane.
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for Survival’s website (http://investingforsurvival.com/home)
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