An Analysis of Daily Events that Impact Your Money
Wednesday, June 3, 2020
The Morning Call---Blow off top?
The Morning Call
The Averages(25742, 3080) maintained their upward
momentum.Both of the indices remain in
very short term uptrends.The S&P has now successfully challenged
both its 100 and 200 DMA’s (now support).The Dow finished above its 100 DMA for a second day (now resistance; if
it remains there through the close today, it will revert to support). The one negative is those huge 5/18 gap opens
that remain unfilled and 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.
GLD was off but its
chart remains strong. TLT was down,
ending below the upper boundary of its intermediate term uptrend---not necessarily
a negative but a sign of the loss of upside momentum; while the dollar was
whacked again, finishing below (1) the lower boundary of its short term uptrend
for the third day, resetting to a trading range and (2) both its 100 and 200
DMA, both having reverted to resistance. This pin action is pointing to a risk
off scenario (a little bit less so for GLD), though it is clearly at odds with
Bottom line.this Market has a lot of the signs of some
kind of blow off top.I don’t know if the
indices can make all the way back of their former highs; but it sure looks like
higher stock prices are in the cards.In
my opinion, this is an extremely risky time to be buying stocks.All my attention is focused on our holdings
that at nearing their Sell Half ranges.
May EU final manufacturing PMI came in at 36.6 versus forecasts of 36.8; the
services PMI was 30.5 versus 28.7; the composite PMI was 31.9 versus 30.5; the April
unemployment rate was 7.3% versus 8.2%; April PPI was -2.0% versus -1.8%.
The UK May final
manufacturing PMI was 40.7, in line; the services PMI was 29.0 versus 28.0; the
composite PMI was 30.0 versus 28.9.
The May German final
services PMI was 32.6 versus expectations of 21.4; the composite PMI was 32.3
versus 31.4; the May unemployment rate was 6.3% versus 6.2%.
The May Japanese
final services PMI was 26.5 versus projections of 25.3; the composite PMI was
27.8 versus 27.4.
The May Chinese Caixin
final services PMI was 55.0 versus estimates of 48.6; the composite PMI was
54.4 versus 49.1.