The Morning Call
11/23/20
I am off this week. Have a great Thanksgiving.
The
Market
Technical
The S&P remains in a three month
trading range, having failed to break above its all-time high for the third
(fourth) time. Long term, its bias is to
the upside but with the caveat that it may have made a major top. The good news is that it did not experience a
sell off after being rejected at its high.
The bad news is that there are multiple gap up opens going back to 2300
that need to be filled.
More month end rebalancing on deck.
The long bond is also in a short term
trading range, though at eight months, it is bordering on becoming a longer
term range. Also like the S&P, it
has bounced off its all-time high three times; but it also held above the lower
boundary of its very short term uptrend.
Also like the S&P, its price bias is to the upside (in uptrends
across all timeframes) but with the caveat that it may have made a major top.
Gold continues in a three month plus
trading range. On the surface, it seems
to have a slight short term downward bias.
That drift lower is off its all-time high and it has reset its 100 DMA
to resistance. So, there is reason to
wonder if a top has been made. On the
other hand, it has bounced off the lower boundary of its trading range four
times demonstrating strong support at the 153 ½ level. Plus, it is uptrends across all timeframes
and remains above its 200 DMA. This is
all a blueprint for uncertainty. My bottom
line is that the long term bias is to the upside but a decent probability exists
that GLD has made a top.
The dollar made, at least, an interim top,
traded lower but found support near the lower boundary of its short term
trading range now being reinforced by the lower boundary of its intermediate term
uptrend. The question is, is the dollar acting
as a leading indicator for the other indices, i.e. (1) UUP clearly made a top;
the others seem to have made a top, (2) UUP traded lower and has found strong
support, the other indices are trying to build a support level.
Bottom line: all the indices have made
tops and are attempting to consolidate.
The $64,000 question is will they be successful? The answer is that I haven’t a clue and, therefore,
I believe it is a time to be on the sidelines.
Friday in the charts.
https://www.zerohedge.com/markets/stocks-dip-crypto-rips-dark-winter-trumps-spring-reopening
Fundamental
Headlines
The
Economy
Review of last week
The economic
data last week was positive as were the primary indicators (three plus, one
neutral, one negative). This is the
first sign of any meaningful improvement in several weeks---which begs the
question, was this an aberration or the start of something new? Follow through.
For the
moment, I continue to discount any notion of a ‘V’ shaped recovery. Not helping is the declining odds of a
stimulus bill anytime soon. Plus, the reimposition
lockdowns are making a ‘V’ recovery even more unlikely.
Overseas, the
indicators were neutral, maintaining the erratic course of the global economy. And with renewed lockdowns occurring across
Europe, there does not seem much hope of improvement. Not helpful to our own recovery.
Whatever the
shape or magnitude of the near term bounce back, I am not altering my belief
that long term the economy will grow at a historically subpar secular rate due
to the twin burdens of egregiously irresponsible fiscal and monetary policies---which,
by the way, are becoming even more egregiously irresponsible as a result of
measures being taken by the government and the Fed in dealing with the current
crisis.
US
International
Other
Losses from student loans may eclipse subprime
crisis.
https://www.zerohedge.com/markets/losses-student-loans-may-eclipse-subprime-crisis
News on Stocks in Our Portfolios
Fastenal (NASDAQ:FAST) declares $0.40/share special
dividend.
Tiffany (NYSE:TIF) declares $0.58/share quarterly dividend,
in line with previous.
What
I am reading today
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for Survival’s website (http://investingforsurvival.com/home)
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