The Morning Call
8/9/21
The
Market
Technical
The S&P had a busy week. It successfully challenged its short term uptrend
(again), reset to a trading range, and is now challenging the upper boundary of
that trading range (if it remains there through the close on Wednesday, it will
reset to an uptrend). I have been
through this before; but to refresh, all this frequent breaking of trends is a
function of the S&P’s upward price trend increasing at a slower rate than
the angle of assent of the (ever changing) short term uptrend. In short, the upward momentum of the S&P
is slowing. That is not necessarily a bad thing. Most likely, it just means that the buyers
are getting exhausted and some consolidation is order.
https://www.zerohedge.com/markets/market-stalls-all-time-highs-awaiting-fed
The long bond maintained
its upward momentum for most of the week, then got hammered on Friday, creating
a big gap down open. As always follow
through is critical; but also, the need to fill that gap is important. We need more pin action before any
directional conclusions can be made.
Like TLT, GLD had
a rough ending to the week. Down on
Thursday and then a big gap down open on Friday. In the process, it negated an upside break of
its 200 DMA (leaving it as resistance) and began a challenge of its 100 DMA
(now support; if remains there through the close on Wednesday, it will revert
to resistance). On a more positive note,
it (1) remains in uptrends across all timeframes and (2) needs to close that
gap down open. Also, like TLT, we need
follow through for more directional information.
https://www.zerohedge.com/markets/gold-flash-crashes-almost-100-4-billion-sell-order-hits
Gap opens appear
to have been the pin action of the day on Friday---with the dollar gapping up
on the open. All three (TLT,GLD,UUP)
point to a stronger economy/higher rates,
likely the result of Friday’s slightly stronger employment report and a
couple of Fed trial balloons hinting at a firmer Fed faster than is currently
discounted. That, of course, is somewhat
at odds with my forecast. So, I will be watching these indices closely for
follow through ---which would indicate a need for a change in outlook. For the moment, one day does not a trend
make.
Friday in the
charts.
https://www.zerohedge.com/markets/big-jobs-beat-batters-bonds-commodites-crypto-stocks-bounce
Fundamental
Headlines
The
Economy
Review of Last Week
The data releases
last week were evenly divided though the primary indicators were to the plus
side (two positive, one negative). Still,
the stats continue to confirm that the post Covid burst of economic activity is
slowing.
Overseas, the numbers
were dead even.
Bottom line. ‘As
you know my opinion is that following an initial snapback (which may already
be over), the US economy will likely return to its former subpar secular growth
rate, stymied by an irresponsible mix of fiscal/monetary policies.’
US
International
The June German
trade balance was +E16.3 billion versus +E12.5 billion reported in May.
July Chinese CPI
was +0.3% versus consensus of +0.2%
Other
June consumer credit soars.
The
Fed
Not much love for the Fed economists from
Jeffery Snider.
Fiscal
Policy
CBO estimates that infrastructure bill will add
$256 billion to deficit.
The
coronavirus
Study shows vaccination provides limited
immunity.
Bottom line
Buffett sells stocks for third quarter in a row.
News on Stocks in Our Portfolios
Illinois Tool Works (NYSE:ITW) declares $1.22/share
quarterly dividend, 7%
increase from prior dividend of $1.14.
What
I am reading today
Now rocks are racist.
https://www.zerohedge.com/political/university-spends-50000-removing-racist-boulder-campus
Visit Investing for Survival’s
website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
No comments:
Post a Comment