The Morning Call
5/4/20
The
Market
Technical
Friday
was not a good day, technically speaking.
In a selloff, the S&P voided its newly reestablished very short term
uptrend and closed below its 4/17 high, putting it back within the 4/17-4/20
trading range which encompasses the 50% Fibonacci retracement level off the
3/23 low. Viewing the trading since mid-April,
it looks like that Fibonacci level appears to be exerting a magnetic pull on
stock prices.
https://www.zerohedge.com/markets/if-bear-market-over-why-are-commodities-transports-underperforming
The
long bond maintains its upward momentum, having just made a higher low after
making a higher high last week. So, the
trend in rates is lower, reflecting the current economic weakness or the need
for safety or both.
Similarly, GLD continues
to make higher highs and higher lows (supporting TLT’s message of economic
weakness, the need for safety or both).
Though, it seems to be losing a bit of upward momentum---not especially
surprising given that it has broken above the upper boundaries of two
uptrends. Those boundaries tend to have
a magnetic pull to them.
The dollar is struggling. While it did make a higher low on Friday (albeit
just barely), it is near challenging both DMA’s and has two lower highs. A lower dollar would support the notion of
economic weakness but not a need for safety.
Even
though the VIX jumped on Friday (as it should on a down day), it held its very
short term downtrend---for at least a day, a plus for stocks.
Fundamental
Headlines
Bombshell report
on coronavirus origins.
Sweden may have already
won the debate.
Infrastructure
spending is a great idea but the coronavirus crisis is not the reason to do it.
The need for a
reverse ‘bail in’.
The latest from Warren
Buffett (must read):
The latest from David Stockman.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
International
The
April EU manufacturing PMI was 34.5 versus estimates of 34.4.
Other
What
I am reading today
New Michael Moore movie
blasts ‘green movement’.
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