The Morning Call
12/2/19
The
Market
Technical
Despite the sell
off on Friday, the S&P continues its relentless advance. It is likely being aided by seasonal
factors. Expect more to the upside, but
be aware that this latest pin action is looking increasingly like some kind of
blow off top.
The
long bond remains in uptrend across all timeframes and above both MA’s. But you can see that the trend of lower highs
is signaling some loss of momentum. I am
assuming that rates will continue to move lower; though that is clearly in
conflict with the message of the stock market.
The
dollar has regained the momentum that it lost in October. If that is implying an improving economy then
its investors that would support the view of the equity markets. If its pin action is being driven by the need
for safety, then it supports the long bond.
Gold had a decent
week. While it remains in very short
term and short term uptrends and above its 200 DMA, it has lost upside momentum
and is struggling to recover above its 100 DMA---which is key to regaining that
upside momentum. Its recent price action
suggests that investors are unclear about the direction of the economy and
interest rates.
The VIX continues
to show a good deal of complacency among stock investors which is no real
surprise given the pin action in the S&P
Friday in the
charts.
Fundamental
Headlines
The
economic data was again negative last week.
While the primary indicators mixed (two positive, two negative), I am
still rating it a negative. Score:
in the last 216 weeks, sixty-nine were positive, ninety-nine negative and forty-eight
neutral.
Overseas, it was more of
the same, though the stats were a bit less skewed to the negative. Nonetheless, they were negative.
Thoughts from Ray
Dalio and Paul Tudor Jones.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
Q3
Japanese capital spending rose 7.1% versus forecasts of +2.8%.
The
November final manufacturing PMI for Japan was 49.4 versus expectations of 48.9; for the Chinese Caixin it was 51.8
versus 51.4; for Germany 44,1 versus 43.8; for the EU 46.9 versus 46.6; for the
UK 48.9 versus 48.3.
Other
Automakers
offering record incentives.
The
most important and overlooked economic number.
What
I am reading today
Quote of the day.
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