The Morning Call
10/10/19
The
Market
Technical
The Averages
(26346, 2919) recovered yesterday, though volume was down and they remained
below their 100 DMA for a second day (now support; if they remain there through
the close today, they will revert to resistance). On the other hand, breadth improved and the
VIX fell below the lower boundary of its very short uptrend (now support; if it
remains there through the close today, it will revert to resistance).
While yesterday’s
pin action was an improvement, the indices remain in a trend of lower highs and
below their 100 DMA’s. For the time
being, I am sticking with my assumption that the trend is up. However, if they successfully challenge both
MA’s, then it points to a turn to the downside in momentum.
Yesterday’s price
action in gold, the dollar and the long bond provided little directional
information.
Wednesday
in the charts.
https://www.zerohedge.com/markets/late-day-china-trade-headline-spoils-low-volume-stock-market-party
Fundamental
Headlines
A couple of
datapoints were reported yesterday: the August job openings report showed a
decline while wholesale inventories declined on flat sales.
Overseas, September Japanese machine tool orders
plunged.
The major new items:
(1)
the FOMC released the minutes of its latest meeting
which read more hawkish than anticipated.
(2)
turmoil in repo market eases as NotQEIV expands.
(3)
China trade talks were on a roller coaster ride.
First the good (sort of news).
Then, the bad news.
***overnight, Markets were chaotic with rumors
swirling that there was some kind of ‘mini-deal’ and that there was no deal and
the Chinese were going home early.
Bottom
line: stay focused on the long
term. Right now, stock prices are a
short hair off their all time highs. So,
at least some portion of a trade deal is priced in. However, if there is anything resembling a ‘comprehensive’
agreement, that would still be a plus for the economy, investor psychology and valuations. The question is how much? I continue to believe that the best strategy
is to Sell Half of a position if the stock trades into that price range
irrespective of a trade deal.
Bottom line:
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
September
CPI was flat versus estimates of up 0.1%; core CPI was +0.1% versus +0.2%.
Weekly
jobless claims rose 29,000 versus consensus of a decline of 3,000.
International
August
Japanese machinery orders fell 14.5% versus forecasts of down 10.8%; September PPI
was flat versus -0.1%.
The
August German current account was a surplus of E16.9 billion versus
expectations of +E18.1 billion.
August
UK manufacturing production was -0.7% versus projections of 0.0%; industrial
production was -0.6% versus -0.1%; construction output was +2.4% versus -0.2%;
YoY GDP was +1.1% versus +0.9%
Other
What
I am reading today
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