The Morning Call---This is just mania and, as such, it will end.

 

The Morning Call

 

9/9/20

 

The Market

         

    Technical

 

The Averages  (27500, 3331) took another beating yesterday with the S&P finishing below the lower boundary of its short term uptrend (if it remains there through the close on Wednesday, it will reset to a trading range).  Clearly, a potential adverse development.  On the other hand, the negatives that I have been dwelling on over the last month are dissipating: (1) two of the four gap up opens have been filled, (2) the VIX which was not in sync with stocks as they advanced remains out of sync as they fall, (3) the Markets’ overbought condition is being ameliorated but (4) unfortunately, September’s record as the worst month of the year for Market performance is not going away. And let’s not forget that both of the indices remain above both DMA and in intermediate and long term uptrends.

 

The worst time of the year.

            http://www.crossingwallstreet.com/archives/2020/09/the-worst-time-of-the-year.html

 

The key in the short term is whether the S&P can hold its short term uptrend.  If not, then we are likely in for more downside.  But that does not change my current operating assumption that the Market’s bias is to the upside long term---and until QEInfinity/Forever either comes to an end or investors conclude that it has been, is and will be an economic disaster. 

 

Gold was off fractionally, remaining below the uptrend off its March/June lows.  Though it held a minor (July/August) support level.  Still, its pin action is troubling. Ditto TLT which rose 5/8%, but remained below its 100 DMA.  The dollar was up ½% and is trying to make a higher high.  But its chart remains the ugliest of those indicators that I follow. 

           

            Tuesday in the charts.

            https://www.zerohedge.com/markets/crude-crushed-tech-wrecked-banks-battered-bonds-bullion-bid

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications rose 2.9% while purchase applications were up 2.6%.

 

July consumer credit rose $12.25 billion versus expectations of up $13.75 billion.

                          https://www.zerohedge.com/economics/americans-pay-down-credit-cards-5th-consecutive-month-post-covid-deleveraging-continues

 

                        International

 

                          August Chinese CPI came in at +0.4%, in line; PPI was -0.2%, also in line.

 

                        Other

 

                          Permanent job losses still do not match 2008/2009.

                          http://gregmankiw.blogspot.com/2020/09/comparing-two-recessions-update.html

 

                                  States face dire fiscal problems.

                          https://www.nytimes.com/2020/09/07/business/state-budgets-coronavirus-aid.html?action=click&module=Top%20Stories&pgtype=Homepage

 

                                  Update on seven high frequency economic indicators.

                          https://www.calculatedriskblog.com/2020/09/seven-high-frequency-indicators-for.html

 

                                  A tale of two recessions.

                          https://www.politico.com/news/2020/09/07/income-inequality-wealth-gap-409234

 

                                  There is no recovery.

                          https://www.zerohedge.com/markets/there-no-recovery

 

            The coronavirus

 

              How we handled the virus was a mistake.

              https://www.washingtonexaminer.com/opinion/columnists/were-the-lockdowns-a-mistake

 

              But Sweden, that is another story.

              https://www.zerohedge.com/medical/sweden-close-victory-over-coronavirus-never-had-lockdown-or-mask-mandate

 

            The Fed

 

              Ron Paul on the Fed’s brilliant new policy.

              https://www.zerohedge.com/economics/ron-paul-pans-feds-brilliant-plan-more-inflation-and-higher-prices

 

              The flaws in Fed policy (must read).

              https://www.zerohedge.com/markets/averaging-inflation-does-not-eliminate-flaws-feds-policy-approach-it-compounds-them

 

            Bottom line.  This is just mania and, as such, it will end.

                        https://alephblog.com/2020/09/08/crowding-the-market-in-large-cap-tech/

 

 

              Interview with Byron Wien.

              https://themarket.ch/english/byron-wien-the-market-is-vulnerable-ld.2646

 

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            David Stockman on crime and punishment.

            https://www.zerohedge.com/political/stockman-sidesteps-systemic-racism-says-real-evil-relentless-aggrandizement-state-power

 

 

            Quote of the day.

            https://cafehayek.com/2020/09/quotation-of-the-day-3277.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CafeHayek+%28Cafe+Hayek%29

 

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.