Catch Up

 

The Morning Call

 

10/29/20

 

The Market

         

    Technical

 

            Our daughter went into the hospital and we have been taking care of the grandchildren, so pardon my absence.  As always happens when I take off, the Market goes bananas one way or the other. 

 

            Below is an updated S&P chart showing three technical points: (1) the S&P made a lower high on October 12^th, raising the possibility of a double top [clearly not good on a long term basis], (2) it successfully challenged its 100 DMA; if it remains there through the close on Friday, it will revert to resistance [clearly not good on a short term basis] and (3) it opened a major gap down yesterday---which as you know, I believe creates a magnetic pull to be filled [clearly good on a short term basis]. 

 

Thinking forward technically, the S&P could fill that gap open which would also take it back above its 100 DMA.  For that action to be anything other than a short term rally, it would have to then break the newly created downtrend of lower highs and then challenge its all time high.  If not, we could be witnessing either (1) the start of another correction similar to last March or  (2) a double top which would mark the end of this long bull market.  However, the latter would be getting ahead of ourselves.  I still believe the underlying trend is up and will remain so as long as the Fed keeps the liquidity gates open.

 

 

            On the fundamental side, none of this weakness is surprising given the proximity of the most highly contentious election in my memory and what appears to be the ‘second wave’ of the coronavirus.

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

                          Weekly jobless claims rose 751,000 versus expectations of up 775,000.

                          https://www.zerohedge.com/personal-finance/pandemic-emergency-jobless-claims-soar-record-high

 

                          Q3 GDP came in at +33.1% versus estimates of +31.0%.

                          https://www.zerohedge.com/markets/us-gdp-soars-record-331-q3-smashing-expectations

 

                        International

 

                        Other

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

           

 

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