The Morning Call
5/27/20
The
Market
Technical
The Averages (24995, 2991) exploded at the open but
experienced a bit of heartburn near the close.
Still, they closed with a major gain.
This strong performance went a ways in correcting the Market’s confused
technical state. The Dow voided its
developing double top formation and reset its very short term trend to up,
joining the S&P. The S&P pushed
above its 100 DMA (now resistance; if it remains there through the close on
Thursday, it will revert to support) and its 200 DMA but failed to hold above
that level. Nevertheless, those huge
5/18 gap opens remain unfilled and they will continue to act as a magnet that
needs to be closed.
My assumption
continues to be that equity prices’ bias is to the upside but that effort will
be labored. The resistance presented by
both indices’ 100 and 200 DMA’s, the magnetic pull of the 5/18 gap up opens and
the pin action in the VIX (which continues to be unable to push below its 5/13
low) support that notion.
TLT, GLD and UUP
were down---not surprising on a big risk off day. However, their charts remain strong, suggesting
that their investors remain risk averse.
Tuesday
in the charts.
Fundamental
Headlines
Yesterday’s
economic stats were weighed to the plus side.
The March Case Shiller home price index, April new home sales, the May
Dallas Fed manufacturing index were better than anticipated while May consumer
confidence and the April Chicago Fed national activity
index were below expectations.
Overseas,
the numbers were even more upbeat. The March Japanese leading economic
indicators, its March All Industry index and June German consumer confidence
were above forecast and final Q1 German GDP was in line.
The
coronavirus
***overnight
update.
More coronavirus
data.
The leak from the
Wuhan lab.
We should have
never closed.
European
Commission proposes E750 billion recovery fund.
The
Fed
Clueless wizards.
Bottom line: what
do you say about a Market that is unfazed by unknowns that include the
magnitude and extent of an economic recovery, scale of changes that will almost
surely occur in American’s social and spending patterns and heightening
tensions with China? You say that as
long as investors are unconcerned about valuations, as long as ‘money’s for
nothing’, stock prices’ bias will be up.
I cannot buy a stock whose valuation is almost solely determined by
monetary policy.
The latest from
John Mauldin.
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
Weekly
mortgage applications rose 2.7% while purchase applications were up 8.6%.
Month to date
retail chain store sales fell less than in the prior week.
The
March Case Shiller home price index was up 1.1% versus expectations of +0.2%
April new home sales were
up 0.6% versus estimates of down 21.9%.
May
consumer confidence came in at 86.6 versus forecasts of 87.5.
The
May Dallas Fed manufacturing index was -49.2 versus consensus of -57.0.
International
April
Chinese YoY industrial profits fell 27.4% versus estimates of -28.0%
Other
How US consumers
are spending during coronavirus lockdown.
What
I am reading today
Astronomers
discover cosmic ‘ring of fire’
Chinese
troops reportedly have ‘invaded’ Indian territory.
Four financial milestones
to reach before retirement.
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for Survival’s website (http://investingforsurvival.com/home)
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