The Morning Call--Patience, at least for today

 

The Morning Call

 

7/20/21

 

The Market

         

    Technical

 

            Needless to say, a lot went on yesterday, technically speaking.  The S&P made a gap down open (which will need to be closed) and challenged the lower boundary of its short term uptrend (now support; if it remains there through the close on Wednesday, it will evert to resistance).  Intraday, it touched 4240 (which is a critical options related support level) but bounced and closed higher.  The key here is follow through.  Will this be just another ‘buy the dip’ moment’ or is concern about the delta variant (which as you know, I think is bogus) or a slowing economy enough to offset QE?  Search me but bonds may be giving us a hint (see below).  In any case, today is not the time to be making any long term bets.  Patience.

            https://www.zerohedge.com/markets/hedge-funds-ramp-exposure

 

            Bonds also had a notable day.  TLT made a gap up open (which will need to be closed) on huge volume.  It finished above its 200 DMA (now resistance) for the third day; so, if it remains there through the close today it will revert to support.  This pin action clearly supports the concern manifested in equity prices.  As you know, I believe bond traders are smarter than the stock boys.  So, this suggests more downside in equity land.

 

            Monday in the charts.

            https://www.zerohedge.com/markets/crude-crashed-stocks-slammed-bitcoin-bond-yields-battered

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

June housing starts rose 6.3% versus projections of up 2.8%; building permits were down 5.1% versus up 1.0%.

 

                          The July housing market index came in at 80 versus expectations of 82.

    https://www.advisorperspectives.com/dshort/updates/2021/07/19/nahb-housing-market-index-builder-confidence-edges-lower-as-material-  challenges-persist

 

                        International

 

                          June Japanese CPI was 0.3%, unchanged from the May reading.

 

                          June German PPI was 1.3% versus estimates of 1.1%.

 

                        Other

                       

                          Update on big four economic indicators.

                          https://www.advisorperspectives.com/dshort/updates/2021/07/19/the-big-four-may-real-retail-sales-up-0-6

 

                          Update on seven high frequency indicators.

                          https://www.calculatedriskblog.com/2021/07/seven-high-frequency-indicators-for_19.html

 

                          OPEC agrees on oil production increase.

                          https://www.nytimes.com/2021/07/18/business/opec-plus-oil-production.html

 

                          Economy is expected to cool.

                          https://www.wsj.com/articles/red-hot-u-s-economy-expected-to-cool-from-here-11626600602

 

            The coronavirus

 

              The market is expert at pricing individual risk.

              https://www.realclearmarkets.com/articles/2021/07/19/the_market_is_expert_at_pricing_individual_risk_let_markets_work_786015.html

 

                          The panic pandemic.

              https://www.city-journal.org/panic-pandemic

 

              Masks are nothing but ‘comfort blankets’.

              https://www.zerohedge.com/covid-19/uk-government-advisor-admits-masks-are-just-comfort-blankets-do-virtually-nothing

 

    Bottom line.

 

            Knowledge versus experience.

            https://www.advisorperspectives.com/commentaries/2021/07/19/knowledge-vs-experience-why-most-investors-wind-up-losing

 

    News on Stocks in Our Portfolios

 

Johnson & Johnson (NYSE:JNJ) declares $1.06/share quarterly dividend, in line with previous.

 

What I am reading today

 

            Major league baseball’s crackdown on ‘sticky’ substances.

            https://www.nytimes.com/interactive/2021/07/19/upshot/major-league-baseball-spin-rate-shift.html

 

            Wokeness is sabotaging our military academies.

            https://www.washingtonexaminer.com/opinion/wokeness-is-sabotaging-the-military-academies

 

                Quote of the day.

            https://cafehayek.com/2021/07/quotation-of-the-day-3591.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+CafeHayek+%28Cafe+Hayek%29

 

 

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