The Morning Call
9/4/20
The
Market
Technical
The Averages (28292, 3455) were hammered yesterday on
higher volume and very negative breadth.
In the last couple of weeks, I have been pointing to a number factors suggesting
that some sort of correction was in the offing: (1) a series of four gap opens over the last
month. Yesterday’s pin action took care
of the most recent gap. Three to go, (2)
the VIX was broadly anticipating yesterday’s carnage, (3) despite the weakness
in breadth, it remains in overbought territory and (4) historically, September
is the worst month of the year for Market performance.
The question is
clearly follow through. Short term, the
aforementioned technical factors could weigh on prices. But that would be technically healthy. This Market needs a rest. On the other hand, as you know, my operating assumption
has been that the Market’s bias is to the upside long term. At the moment, there is no reason to doubt
that. Both indices are above their DMA’s
and, except for the Dow’s short term trading range, are in uptrends across all
timeframes.
That is not to say
that the fundamental day of reckoning, which I also have been predicting, is
upon us. But that remains to be
seen. The good news is that if it is, my
cash position will hold me in good stead.
https://www.zerohedge.com/markets/has-it-begun
BofA’s ‘must know’
Market stats.
Gold was off again,
finishing below the uptrend off its March/June lows for a second day (though it
did set a gap down open on Wednesday). In
addition, it has now made a second lower high---so we have a second short term
negative. The key is follow
through. TLT rose again, ending above
the uptrend off its March/June low for a second day and above its 100 DMA (now
resistance; if it remains there through the close on Monday, it will revert to
support). Clearly, a plus. The dollar was up fractionally, but its chart
remains the ugliest of those indicators that I follow.
Thursday in the charts.
https://www.zerohedge.com/markets/we-should-be-concerned-biggest-market-crash-march-frightens-fed
Fundamental
Headlines
The
Economy
US
The August
services PMI came in at 55.0 versus estimates of 54.8; the composite PMI was
54.6 versus 54.7.
The August ISM
nonmanufacturing index was reported at 56.9 versus consensus of 57.0.
August nonfarm
payrolls rose 1,371,000 versus expectations of 1,400,000;
the unemployment
rate was 8.4% versus 9.8%.
https://www.zerohedge.com/markets/unemployment-rate-unexpedctedly-tumbles-august-payrolls-come-line
International
July German
factory orders were up 2.8% versus forecasts of +5.0%; the August construction
PMI was 48 versus 49.1.
The August UK
construction PMI was 54.6 versus projections of 58.5.
Other
The global coronavirus economy.
https://www.politico.com/news/2020/09/02/global-coronavirus-economy-depression-408165
The
Fed
The Fed abandons the Phillips Curve.
Paul Volker turning in his grave (must read).
China
China will sell 20% of its US Treasury
holdings.
Bottom
line Thank the Fed.
https://alephblog.com/2020/09/02/only-a-trickle/
August dividends by the numbers.
The ‘other-side’ argument.
http://mrzepczynski.blogspot.com/2020/09/smart-investors-not-immune-from-my-side.html
The coronavirus
price compression.
https://www.pragcap.com/the-covid-price-compression-in-technology/
News on Stocks in Our Portfolios
What
I am reading today
The future is
coming.
http://blog.yardeni.com/2020/09/the-future-is-coming-technology.html
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for Survival’s website (http://investingforsurvival.com/home)
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