Monday, January 4, 2021

The Morning Call--Monday Morning Chartology


The Morning Call




The Market




            The S&P continues its move to higher ground, remaining in uptrends across all timeframes, even in the very short term.  As long as this kind of momentum exists, there is really nothing to do but sit back and enjoy.  That said, given the current level of valuations and uncertain economic outlook, I am not feeling complacent.  The higher prices go, the more vigilant I will be.


            The long bond completed a successful challenge of the downtrend off its August high.  A plus to be sure; but it still remains in a short term trading range and below both DMA’s.  A continued move to the upside would suggest that investors are increasingly convinced that inflation will not be a problem and/or the economy is slowing.


            On Thursday, gold appeared to be following the move in TLT, beginning a challenge of the downtrend off its August high as well as its 100 DMA.  The problem is that a move higher in GLD implies the opposite of a move higher in TLT; to wit, that investors are growing more confident in a rise in inflation.


            On the other hand, the decline in the dollar has shown no signs of abetting, suggesting the investors has not altered their concern about higher inflation.


            So, investors have a mix and match problem.  Do they believe stocks and bonds or gold and the dollar?  There is no consistent theme being reflected in the pin action of these four indices.  My takeaway is that since there is considerable disagreement among various types of investors and I am not smart enough to know who is right, caution is a virtue.


            2020 in the charts.



                Is there a January effect?








              The Economy




                        Week of 12/14


Overall, the stats in the US were negative, but the primary indicators that were positive outnumbered the negative three to one.  I’ll score it as a slight plus.


Overseas, the indicators were again very positive---for a fourth week in a row----again bringing hope of global economic improvement..


Week of 12/21


In the US, the stats were negative and the primary indicators were abysmal (one positive, three negative)---a turnaround from the prior week.


Overseas, the numbers were a bit skimpy.  But that said, they continued their positive trend,


Week of 12/28


Talk about skimpy.  They were almost nonexistent.  What there was, was balanced in the US and negative overseas.


In sum, both the US and global economies continue to grudgingly improve but certainly not in a ‘V’ shaped recovery.  Perhaps more in line with a ‘K’ or Nike swoosh pattern.


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.










November UK mortgage approvals were 105,000 versus estimates of 82,500.


The December German final manufacturing PMI came in at 58.3 versus consensus of  58.6; the EU final PMI was 55.2 versus 55.5; the final UK PMI was 57.5 versus 57.3.




                          Does an extra $2,000/person pandemic relief make good economic sense?



                                                  US housing enters massive bubble.



             The coronavirus


                New wave of lockdowns in EU.



               There is plenty of blame to go around.





              Analysis of Xi’s latest economic speech.



    News on Stocks in Our Portfolios


Johnson & Johnson (NYSE:JNJ) declares $1.01/share quarterly  dividend, in line with previous.


What I am reading today


            Archeologists find ancient food shop in Pompeii.



            The unintended consequences of giving bureaucrats too much power..



            Review your credit profile.



            Quote of the day.

            Quotation of the Day... - Cafe Hayek


Visit Investing for Survival’s website ( to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.





No comments:

Post a Comment