The Morning Call
11/22/19
The
Market
Technical
The Averages (27766,
3103) continued to fade yesterday, but keeping the current consolidation off a
very overbought condition quite mild. Breadth
was weak again as the overbought condition gets worked off. Volume fell and the VIX was up 2 ¾%. On the other hand, the Dow negated its very
short term uptrend and the S&P will do so today in the absence of a
rally.
The bond market retreated
5/8%, but remained above its 100 DMA for a second day (now resistance; if it
remains there through the close today, it will revert to support). If the challenge is successful, the downward momentum
in TLT will clearly be over. The only
remaining negative is that it is still in a very short term trend of lower
highs.
The dollar was up
1/8%, holding above the lower boundary of its short term uptrend.
Gold was down ½ %,
retreating from both the upper boundary of its very short term uptrend and its
100 DMA (now resistance).
The UUP, TLT and
GLD are all nearing or in the process of challenging key support/resistance levels
which if successful would not only mark a change in momentum but also imply a
reversal in economic perceptions. Were
TLT and GLD to successfully challenge the aforementioned resistance levels and
the dollar hold its uptrend, it would suggest a flight to safety. If the dollar breaks down, it would imply a
weaker economy.
Thursday in the
charts.
Fundamental
Headlines
Yesterday’s data
was upbeat. While weekly jobless claims
were disappointing, October existing home
sales (primary indicator) and the November Philadelphia Fed manufacturing index
were markedly positive.
Update on recession
odds.
One of the economic
positives that I have consistently listed is the decrease in the regulatory
burden on industry. While much of what
we have seen to date supports that, this piece points out that there is another
side to that coin.
Overseas, the
November flash EU consumer confidence index was slightly better than
anticipated.
Bottom line: aside
from the political circus and the US/China trade circle jerk, it was a quiet
day as the Market calmly works off an overbought condition. Nothing has changed.
For the bulls.
Making money versus
sounding smart.
News on Stocks in Our Portfolios
Tiffany (NYSE:TIF) declares $0.58/share quarterly dividend, in line with
previous.
Brown-Forman (NYSE:BF.B) declares $0.1743/share quarterly dividend, 5% i
increase from prior dividend of
$0.1660.
Home
Depot (NYSE:HD) declares $1.36/share quarterly dividend, in line with previous.
Economics
This Week’s Data
US
October existing
home sales rose 1.9% versus forecasts of up 1.4%.
International
The
November flash EU consumer confidence index was -7.2 versus consensus of -7.3.
The
October Japanese CPI was 0.0%, in line; the November flash manufacturing PMI
was 48.6 versus 48.7, the flash cervices
PMI was 50.4 versus 50.0, the flash composite PMI was 49.4, in line.
Q3
German GDP growth was +0.1%, in line; its November flash manufacturing PMI was
43.8 versus 42.9, the flash services PMI was 51.3 versus 52.0, the flash
composite was 49.2 versus 49.4.
The
November EU flash manufacturing PMI was 46.6 versus estimates of 46.4, the flash
services PMI was 51.5 versus 52.5, the flash composite PMI was 50.3 versus
50.9.
The
November UK flash manufacturing PMI was 48.3 versus forecasts of 49.0, the
flash services PMI was 48.6 versus 50.0
Other
The
economic viability of sanctions.
I
have often voiced skepticism about the ‘reported’ Chinese economic data,
opining that it is just made up. This article
addresses that issue.
What
I am reading today
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