The Morning Call
9/16/19
The
Market
Technical
The S&P chart
is interesting. It is close to
challenging its all-time high; though, as I have already opined, given the
positive news flow on trade and central bank easing, I would have thought that
challenge would already have been made successfully. True, technically speaking stocks are
overbought and fundamentally speaking some of the trade/monetary policy
developments were likely in the price of stocks. Nonetheless, the question is where will any positive
news come from to push prices higher.
Perhaps the bond market is pointing to a stronger economy than is
currently priced in. But if that is the
case then central bank policy may become tighter which could potentially break
the Market/Fed codependency. Hanging
over all of this speculation is recent increase in volatility, declining
liquidity, gap opens and the dramatic reversals in the long bond and gold---all
of which increases uncertainty.
And
speaking of the dramatic reversal in TLT performance---a picture is worth a
thousand words. It is rapidly correcting
the spike that began in July. However,
it remains above both MA’s and in uptrends across all timeframes. So, it is way too soon to assume that the
trend to lower rates is over. Nonetheless,
all those factors mentioned above creates ambiguity.
The one chart in
the line up that shows little sign of volatility/uncertainty is the
dollar. It continues in a solid uptrend
trading above both MA’s and in short and long term uptrends. It likely reflects the growing dollar
shortage much of the result of the lack of confidence in the course of the economy,
trade or central bank policy.
One of the most
discernable elements of GLD’s chart is that sharp rise from June finally appears
to have run its course. Not surprising
because the math of the rate of acceleration of its price move since June
simply couldn’t be sustained on a long term basis.
That doesn’t mean that the longer term trend isn’t
still to the upside. Indeed, gold
remains well above both MA’s and in short term and very short term
uptrends. More consolidation is likely.
The VIX is
mirroring the S&P, heading toward its July low (S&P’s high). Any sign that it could be bottoming/reversing
would be leading indicator for stocks.
Fundamental
Headlines
Iran says that it
is ready for war.
Did Trump lie
about the China phone call? I have no
reason to doubt the veracity of this article.
What the author is missing is that all politicians lie most of the time. So, this is nothing new.
Subscriber
Alert
The price of
Qualcomm (QCOM) has entered its Sell Half Range. Accordingly, the Dividend Growth and High
Growth Portfolios are Selling one-half of their positions.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
The September NY Fed manufacturing
index was reported at 2.0 versus forecasts of 4.0.
International
August
Chinese fixed asset investment came in up 5.5% versus estimates of up 5.6%;
industrial production was up 4.4% versus 5.2%; retail sales were up 7.5% versus
7.9%
Other
IMF
estimates the $15 trillion of global direct investment goes into tax havens.
What
I am reading today
2019 finalist in animal
wildlife comedy photography awards.
A second interstellar object is
zooming through our solar system.
Is the establishment changing its tune
on Russia?
Quote of the day.
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