The Morning Call---It is called distribution

 

The Morning Call

 

9/18/20

 

The Market

         

    Technical

 

The Averages  (27901, 3357) had their first tough day in a week---which may just be related to today’s quad expiration.  Short term, they (1) just made another lower high in a developing trend of lower highs, (2) must still fill two gap up opens lower down and (3) have to overcome September’s negative seasonal predisposition.  So, more downside would not be surprising.  But lots of support exists at their 100 DMA’s (26208/3159), their 200 DMA’s (26208/3097) and the lower boundary of their short term trading ranges (18213/2991).

 

VIX uprising.

https://www.zerohedge.com/markets/vix-uprising

 

Gold reversed again; this time back down, continuing its recent see saw trading pattern between a series of lower highs and the July/August minor support level.  In other words, consolidating.  TLT was up, making a new higher low but it still can’t push through its 100 DMA (now resistance).  Like GLD, it is in a consolidating pattern marked by lower highs and higher lows. The dollar was down, keeping alive the short term trend of lower highs. 

 

Dollar weakness or dollar crash?

            https://www.zerohedge.com/markets/dollar-weakness-or-dollar-crash

 

In short, all these indices are in some sort of consolidation phase---which is not surprising given the economic and political cross currents investors are now facing.

           

            Thursday in the charts.

            https://www.zerohedge.com/markets/sell-all-things-stocks-bonds-gold-dollar-dumped

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

The Q2 current account balance was -$170.5 billion versus expectations of -$157.9 billion.

 

                        International

 

                          August Japanese CPI was down 0.1%, in line.

 

                          August German PPI was flat versus estimates of -0.1%.

 

                          August UK retail sales grew 0.8% versus consensus of up 0.7%.

 

                        Other

 

                          World Bank warns recovery could take five years.

                          https://www.zerohedge.com/markets/world-bank-warns-global-recovery-could-take-five-years

 

            The Fed

 

              The Fed forecasts its own failure.

              https://www.nationalreview.com/corner/fed-forecasts-fed-failure/

 

              It is not stimulus if it is open ended.

              https://thereformedbroker.com/2020/09/17/its-not-stimulus-if-its-open-ended/

 

              It is tough to raise the inflation rate if you do not know why it is low.

              http://www.capitalspectator.com/its-hard-to-raise-inflation-if-its-unclear-why-its-so-low/

 

            The coronavirus

 

              A tale of two lockdowns.

              https://www.realclearmarkets.com/articles/2020/09/17/a_tale_of_two_lockdowns_sweden_vs_the_philippines_577678.html

 

              Part 2.

              https://reason.com/2020/09/16/how-much-difference-do-covid-19-lockdowns-make/

 

              A long way from normal.

              https://www.zerohedge.com/personal-finance/after-6-months-pandemic-lockdowns-theres-still-long-way-go

 

              How trustworthy is the case count?

              https://politicalcalculations.blogspot.com/2020/09/benfords-law-and-trustworthiness-of.html#.X2Oo7mhKiM8

 

              US ambassador accuses China of a coronavirus cover up.

              https://www.zerohedge.com/geopolitical/they-could-have-contained-it-outgoing-us-ambassador-accuses-china-trying-cover-wuhan

 

            Bottom line.  It is called distribution (must read).

              https://www.zerohedge.com/markets/ultra-wealthy-are-selling-billions-dollars-stock

 

              Interest rates and their impact on stock valuation.

              https://www.advisorperspectives.com/commentaries/2020/09/17/interest-rates-and-their-impact-on-stock-values

 

              Another perspective.

              https://theirrelevantinvestor.com/2020/09/16/rising-interest-rates/

 

    News on Stocks in Our Portfolios

 

            Goldman cuts General Dynamics from Buy to Sell.

            https://seekingalpha.com/news/3614939-general-dynamics-cut-to-sell-from-buy-goldman-on-jet-pressures?utm_medium=email&utm_source=seeking_alpha&mail_subject=gd-general-dynamics-cut-to-sell-from-buy-at-goldman-on-jet-pressures&utm_campaign=rta-stock-news&utm_content=link-3

 

What I am reading today

 

            California fires and climate change.

            https://www.zerohedge.com/political/planets-not-angry-stockman-warns-pelosinewsomharris-climate-howlers-are-truly-dangerous

 

            Prepping your finances for a Biden victory.

                        https://www.marketwatch.com/story/some-wealthy-americans-are-prepping-their-finances-for-a-possible-joe-biden-presidency-this-is-all-going-up-and-you-may-never-see-it-as-good-as-it-is-now-2020-09-16?mod=home-page

 

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