The Morning Call
9/10/19
The
Market
Technical
The Averages (26835,
2978) rested again, closing above both MA’s and in uptrends across all
timeframes. Volume was up; and breadth improved. The
only negative is that both of the indices made gap up opens last Thursday---which
will have to be closed.
The VIX rose 1 ¾ %, ending below its 200 DMA for a third
day (now support; if it remains there through the close today, it will revert
to resistance). However, it closed back
above its 100 DMA, voiding Friday’s break and the lower boundary of its August
5th trading range (inversely related to the August 5th
trading range for the Averages), negating Friday’s break.
The
long bond was down 1 ¾ %, finishing above both MA’s and in uptrends across all
time frames. So, the chart remains
strong and the trend toward lower rates remains intact. It also has last Thursday’s gap down
open---which needs to be filled.
Bond
calendar remains near record levels.
The
dollar declined a nickel, but ended above both MA’s and in short and long term uptrends. Like TLT, there is no immediate danger of any
technical breakdown. In addition, it still
has last Wednesday’s gap down open---which needs to be closed.
GLD
was down another 3/8 %. Nonetheless, it closed
above both MA’s and in very short term and short term uptrends. There is
also Thursday’s gap down open---which needs to be filled.
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 have resolved
their August 5th trading range to the upside, pointing to the return
of upward momentum. The next resistance levels
are their July all-time highs (27398, 3027).
The only negative is that both indices plus TLT, UUP and GLD all
experienced gap opens last week, which, in my opinion, just multiples the odds
of price reversals that will close those gaps.
Monday in the
charts.
Fundamental
Headlines
Two minor stats
were released yesterday though neither was upbeat: July consumer credit
rose more than anticipated and August consumer inflation expectations were up.
Update on big four
economic indicators.
The national debt
is now ten times tax receipts.
Overseas, Q2
Japanese GDP growth, its price index and private consumption were all in line; capital
expenditures were lower than expected.
The
July German trade balance was larger than estimates.
The
July UK GDP growth, construction spending, industrial production and trade deficit
were better than consensus.
The danger of a
currency war.
Bottom line: aside
from the above data, the day was quiet on the news front. So, nothing changes in my outlook: the
economy is struggling but not declining (at least not yet); fiscal and monetary
policies are primary reasons for this subpar performance; the odds of a US/China
trade deal before November 2020 are directly correlated to Trump’s willingness to
fold; given that environment, most stocks are grossly overvalued though there
are a few that are near or in their Buy Value Ranges.
Investors growing more
negative on stocks.
***overnight,
comments from Xi.
News on Stocks in Our Portfolios
AT&T
soars after activist proposes breakup.
Economics
This Week’s Data
US
July
consumer credit rose $23.3 billion versus forecasts of up $16.1 billion.
August
consumer inflation expectations were 2.41% versus estimates of 2.65%
Month
to date retail chain store sales declined.
International
August
Chinese CPI came in at 0.7% versus expectations of 0.5%; PPI fell 0.8% versus
-0.9%.
August
Japanese machine tool orders dropped 37.1%
YoY versus projections of -26.0%.
July
UK unemployment was 3.8% versus forecasts of 3.9%; personal income rose 4.0%
versus +3.7%.
Other
August
rail carloads down 4.6%.
Freight
shipping growth and recession probability.
Germany
considering fiscal stimulus.
Update
on auto loans.
Johnson
pushes ahead with plans to suspend Parliament.
Help
for those worried about funny accounting.
The
costs and consequences of a higher minimum wage.
What
I am reading today
Who was the man in the
iron mask?
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
No comments:
Post a Comment