The Averages (28430, 3500) sold off yesterday on higher volume and weakening breadth. More downside would not be surprising given the negatives overhanging the Market: (1) last week, both of the indices made a gap up open, joining those two gap up opens made four weeks ago, (2) the VIX continues to reflect investor concern, (3) the indices’ breadth remains in overbought territory while the rest of the Market weakens and (4) historically, September is the worst month of the year for Market performance. Nonetheless, I am sticking with my assumption that the Market’s bias remains to the upside long term.
Gold bounced, closing above the upper boundary of the pennant formation shown in yesterday’s Monday Morning Chartology and reversing last week’s negative performance. TLT rallied but not enough to undo the damage done in last week’s selloff. Its chart remains negative. The dollar declined, remaining the worst chart of those indicators that I follow.
The dollar decline is greatly exaggerated.
The last time this happened was the day the dot com bubble burst.
Monday in the charts.
The August Dallas Fed manufacturing index came in at 8 versus forecasts of -2.
July Japanese unemployment was reported at 2.9% versus estimates of 3.0%; Q2 YoY capital spending fell 11.3% versus -7.2%.
August German unemployment was 6.4%, in line; August manufacturing PMI was 52.2 versus 53.0.
The August UK manufacturing PMI came in at 55.2 versus expectations of 55.3.
The August EU manufacturing PMI was 51.7, in line; August CPI was 0.4% versus -0.2%; August unemployment was 7.9% versus 8.0%.
Update on seven high frequency indicators.
Chinese bank profits crater.
Monetary policy gone wild.
Latest CDC bombshell.
A brief look at the potential for the new Abbott Labs test.
The state of the American restaurant.
Bottom line. That low rates justify high valuations is a rationalization.
The new normal.
News on Stocks in Our Portfolios
What I am reading today
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