The Morning Call
3/9/20
The
Market
Technical
I don’t need to
tell you what a wild ride the S&P took investors on last week. In the end, (1) it finished below its 200 DMA for a second
day; now support, if it remains there through the close Tuesday, it will revert
to resistance), (2) on the other hand, it made a second run at the lower boundary
of its short term trading range and bounced---that is the good news; the bad
news is that there are no triple bottoms.
***overnight,
S&P futures locked limit down.
The long bond has
the hottest chart on the block. It has pushed
through the upper boundaries of its intermediate and long term uptrends (that
means it is at an all-time price high).
On Friday, it staged a huge gap up open on heavy volume. To me, either TLT is telling us that there is
a massive negative credit/liquidity event about to occur or it is so overbought
that some retreat is inevitable.
GLD (157.55) continued
its strong push to the upside, finishing above the upper boundaries of both its
short term and very short term uptrend. If it can pull away from the gravitational
attraction of these two boundaries, there is no resistance until it reaches the
upper boundary of its long term trading range (185.85).
If GLD and TLT
charts warm the hearts of investors, UUP has to make them want to puke. As I noted this week, one thesis is that the
dollar is getting pounded as investors sell it to buy yen and that will
continue until the Fed lowers short rates even more.
Three weeks ago, I
was talking about how much investor complacency was being reflected in the performance
in the VIX. That has all changed.
Fundamental
Headlines
***overnight, update
on coronavirus.
Isn’t this good
news?
https://www.zerohedge.com/health/china-sends-team-specialists-iraq-covid-19-threat-middle-east-grows
Update
on the repo/liquidity funding problem.
***overnight, Fed
massively ramps up repo facility.
Deflation
is coming.
Saudi Arabia
starts all out oil war.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
Q4
Japanese GDP growth came in at -1.8% versus consensus of -1.7%; capital expenditures
were -4.6% versus -4.3%; private consumption was -2.8% versus -2.9%.
The
January German trade surplus was E13.9 billion versus estimates of E13.4
billion; industrial production was +3.0% versus +1.7%.
Other
What
I am reading today
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