The Morning Call
7/22/20
The
Market
Technical
The Averages (26840, 3257) closed up again on the day,
though well off their intraday highs. The
S&P continued its advance above its June high, indicating a likely
challenge of its February all time high (3393).
However, the Dow was still been able to fill its ‘island top’ on a closing
basis much less pierce its June high. Until
it does so, it could act as a drag on the S&P. The VIX turned in a mixed performance. On the one hand, it ended up on the day
(unusual for an up stock day); on the other, it finished below its 200 DMA for
a third day; a successful challenge would open the way to filling the February
gap up open---support for the S&P. I
am sticking with my assumption that the Market’s bias is to the upside.
Watch the VIX.
Gold was up 1 ¼%, making
another new nine year high. The long
bond was also up, keeping its upward momentum going. The dollar declined on big volume, ending
below the lower boundary of its short term trading range for a second day (if
it remains there through the close today, it will reset to a downtrend). All this suggests a weak economy.
Tuesday in the
charts.
Fundamental
Headlines
The
Economy
US
International
Other
Hourly worker recovery in small businesses.
Or not.
Declining confidence in Trump’s economic
stewardship.
May gasoline sales.
The
Fed
Immaculate deception. Fed style.
Fiscal
Policy
EU adopts groundbreaking stimulus package.
McConnell says no stimulus bill by end of
next week.
Bottom
line. in early June, I suggested that the Market was
demonstrating a number of the characteristics of a blow off top. Not long after, the indices created those ‘island
tops’, making it look like I had been prescient. But it was not so. However now the S&P is pushing towards its
February high with many stocks exhibiting the kind of explosive price action in
the face of serious economic problems that once again reminds me of a blow off
top. I am probably wrong again; but, in my opinion,
the Market is exhibiting unhealthy behavior.
Invest accordingly.
Growth versus value.
Today’s most
unpopular investment.
Mark Cuban warns.
https://www.zerohedge.com/markets/dont-get-greedy-mark-cuban-warns-market-looks-1990s-dot-com-bubble
News on Stocks in Our Portfolios
What
I am reading today
How innovation works.
Innovation
in America is under stress.
https://www.aei.org/economics/americas-system-of-entrepreneurial-innovation-is-under-extreme-stress/
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