The Morning Call
12/11/19
The
Market
Technical
The Averages (27881,
3132) edged further down yesterday. But nothing
changed with respect to the multiple gap opens or my concern that this is not
healthy and could be an indication that the Market is entering or has already
entered a blow off top.
Volume declined; breadth
was negative.
The VIX fell 1/8%,
but it remained above its 100 DMA for a second day (now resistance; if it
remains there through the close today, it will revert to support) and its 200
DMA for a second day (now resistance; if it remains there through the close on
Thursday, it will revert to support).
The long bond was
up one cent, but short term momentum remains down (1) as it is still well below its 100 DMA which
reverted to resistance last Friday and (2)
it continues trade in a trend of lower highs.
The latest from
Jeff Gundlach
The dollar dropped
1/8%, but failed to close Friday’s gap up open. It remained above both MA’s and in a recently
reset to a short term trading range.
More
on the repo financing problem.
Gold was up ¼%, leaving
both last Tuesday’s gap up open and Friday’s gap down open unfilled.
The pin action in
TLT, UUP and GLD support my nervousness about stocks.
Tuesday in the charts.
Fundamental
Headlines
Yesterday’s stats
were mixed. The November small business optimism index was above
forecasts, Q3 nonfarm productivity fell
but so did unit labor costs while month to date retail chain store sales were
extremely disappointing.
The
latest estimate on Q4 GDP growth.
Overseas,
the numbers were pretty dismal. November
Chinese vehicle sales were better than anticipated but its November CPI, November
Japanese YoY machine tool orders, the October UK trade deficit, GDP growth, construction
output, industrial production and construction orders were below consensus.
The trade news was
upbeat. Yesterday before the open, WSJ reported
that Trump would delay the imposition of the December 15th
tariffs. Later in the day, Trump and dems move closer to a deal on NAFTA
2.0.
***overnight, of course,
these clowns can’t go a day without a headline reversing the prior one.
The Donald scuttles
the World Trade Organization.
Bottom line: it
looks like, at least for the next couple of hours, that the December 15th
deadline for an increase in tariffs is behind us. Today, we get the FOMC meeting narrative. Tomorrow, the ECB meeting and the UK election
results. And we have the endless stream of
impeachment headlines. No wonder, the
uncertainty level in elevated. On the
other hand, by the end of the day, we should have renewed confirmation that
NotQE is alive and well which will likely keep the bias in the Market to the
upside.
The
most bothersome factor to me right now is the misgivings expressed above in the
Technical section.
News on Stocks in Our Portfolios
EOG
Resources (NYSE:EOG) declares $0.2875/share quarterly dividend, in line with
previous.
Cummins
(NYSE:CMI)
authorized to repurchase up to $2B of common shares, upon completion of its
2018 $2B share repurchase program.
Economics
This Week’s Data
US
Month
to date retail chain store sales were extremely disappointing.
Weekly
mortgage applications rose 3.8% but the more important purchase applications fell
0.4%.
November
CPI was up 0.3% versus estimates of +0.2%; core CPI was up +0.2%, in line.
International
November
Japanese PPI came in at +0.2% versus consensus of +0.1%.
Other
Diesel
demand slumps.
Thank
you, Paul Volcker.
The
economic affects of the US/China trade war.
What
I am reading today
Michelangelo,
God’s architect.
Why your grocery bill is
rising.
Signing the human rights convention.
A 5,000 year old idea to erase debts
is coming to a town near you.
Joke
of the day.
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for Survival’s website (http://investingforsurvival.com/home)
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