The Morning Call
10/9/19
The
Market
Technical
The Averages (26164,
2893) took it in the chops yesterday. The
bad news is that (1) volume was up but breadth was down, (2) the indices followed
through to downside on Monday’s negative day; last Friday is now a lower high, (3 ) they also closed below their 100 DMA’s
[now support; if they remain there through the close on Thursday, they will
revert to resistance], (4) the VIX remained above both MA’s and in a very short
term uptrend and (5) GLD, TLT and UUP were all up, indicating a retreat to
safety. The good news is that both
remain above their 200 DMA’s.
While yesterday’s
pin action was not pretty. But again, it
is one day’s trading. What will be
meaningful is follow through; so, it is too soon to be calling for a general
sell off. However, the Averages lack of
upside follow through after closing that gap down open does not inspire confidence. I continue to believe that the trend is up,
though less confidently. However, if
they successfully challenge both MA’s, then it points to a turn to the downside
in momentum.
Monday in the
charts.
Fundamental
Headlines
Yesterday’s data
was weighed to the downside: August consumer credit grew more than expected, the September small
business optimism index was less than anticipated as was September PPI and core
PPI. Month to date retail chain store
sales continued to shrink
Overseas, August Japanese
household spending and cash earnings and the September Chinese Caixin services
PMI were below consensus while August German industrial production surprised to
the upside.
IMF warns that
global growth is slowing. Duh.
Other main
headlines:
(1)
Powell announces QEIV but just doesn’t call it
that.
(2)
Trump ramps up China trade tensions. Remember the ‘art of the deal’.
***overnight,
(1)
latest on Brexit.
(2)
Turkey begins invasion of Syria.
(3)
China says [repeats] that it may be open to a
partial trade deal.
Bottom line:
Powell’s QEIV (but don’t call it that) remarks a little impact on the Market in
the face of poor trade news. As I said above,
this is one day’s price action; so, you can’t read too much into it. It is, however, another incident pointing to the
Market’s demotion of monetary policy as ‘the’ most important consideration.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Weekly
mortgage applications rose 5.4% but purchase applications were down 0.7%.
International
September
Japanese machine tool orders plunged 35.5% versus estimates of down 30.0%
Other
What
I am reading today
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