The Morning Call---Do Nothing

 

The Morning Call

 

9/22/20

 

The Market

         

    Technical

 

The Averages  (27147, 3281) had another rough day.  The good news is that (1) the S&P closed both of its July gap up opens [the Dow filled one] and (2) the indices closed well off their intraday lows.  The bad news is that (1) both of the indices are now in very short term downtrends and (2) given their September historical record of poor price performance, additional downside seems likely.  That said, they both have lots of support levels in relatively close proximity that could keep the current decline modest---their 100 DMA’s (26208/3159), their 200 DMA’s (26208/3097) and the lower boundary of their short term trading ranges (18213/2991).

 

Gold fell 2%, finishing right on the July/August minor support level.  TLT was up ½%, ending right on its 100 DMA (now resistance) and the trend of lower highs. The dollar spiked ¾%, breaking the trend of lower highs---the first positive development since March.  So, each of these indices is challenging boundaries of recent consolidation ranges.  Follow through.

 

            Paper gold no longer as important.

            https://www.zerohedge.com/markets/paper-gold-no-longer-important-bofa-finds-physical-demand-now-key-gold-prices

 

 

            Monday in the charts.

            https://www.zerohedge.com/markets/banks-bader-ginsburg-and-limey-lockdowns-slam-stocks-silver-usd-soars

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                        International

 

                        Other

 

                          The latest from Ed Yardini (optimist).

                          http://blog.yardeni.com/2020/09/what-in-world-is-going-on-recovery-from.html

 

                          The latest from John Mauldin (pessimist).

                          https://www.advisorperspectives.com/commentaries/2020/09/18/stall-speed-economy

 

                          Household net worth increased $6 trillion in Q2.

                          https://www.calculatedriskblog.com/2020/09/feds-flow-of-funds-household-net-worth.html

 

                The Fed

 

Powell begins two days of testimony before congress today.  The Fed has released     his prepared remarks.

https://www.zerohedge.com/economics/fed-releases-powells-congressional-hearing-prepared-remarks-defends-poor-uptake-main

 

            The coronavirus

 

              Overnight update.

              https://www.zerohedge.com/geopolitical/us-suffers-most-new-covid-19-cases-5-weeks-doctors-warn-apocalyptic-fall-live-updates

 

              An open letter from Belgian doctors to Belgian bureaucrats and Belgian media.

              https://docs4opendebate.be/en/open-letter/

 

              CDC steps on its own d**k again.

              https://www.zerohedge.com/geopolitical/stunning-reversal-cdc-says-it-published-new-guidance-risks-airborne-covid-19-error

 

            Bottom line  Do nothing

              https://www.zerohedge.com/markets/value-margin-safety-art-doing-nothing

 

              Morgan Stanley turns bearish.

              https://www.zerohedge.com/markets/nasdaq-plunge-dead-ahead-investors-dump-most-qqqs-20-years

 

              More on valuations.

              https://www.appliedfinance.com/valuation-analysis-time-to-reconsider-large-cap-value-growth-allocations/

 

  How big a drawdown can you survive?

  https://thereformedbroker.com/2020/09/21/how-big-a-drawdown-can-you-survive/

 

              When to change.

              https://humbledollar.com/2020/09/when-to-change/

 

              Negativity is not an investment strategy.

              https://awealthofcommonsense.com/2020/09/negativity-is-not-an-investment-strategy/

 

    News on Stocks in Our Portfolios

 

 

What I am reading today

 

            Discovery of an ancient city in China.

            https://www.nationalgeographic.com/history/2020/08/mysterious-carvings-evidence-human-sacrifice-uncovered-ancient-city-china/

 

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