The Morning Call
1/24/22
The
Market
Technical
Wednesday in the charts.
https://www.zerohedge.com/markets/commodities-soar-ruble-routed-tech-wrecked-sp-enters-correction
Given the value
destruction that is going on, I thought an update of the S&P chart would be
helpful. Yesterday, the S&P reset its 200 DMA from support to resistance. It
also began a challenge of the lower boundary of its short term trading range. If
it remains there through the close on Friday, it will reset to a downtrend. I include
the Fibonacci retracement levels in this chart to give some feel for potential
support levels. As you can see, the 23.6% retracement level is in the proximity
of the lower boundary of the short term trading range. If those levels fall,
then the Fibonacci levels are the only real support until the S&P reaches the
lower boundary of its intermediate term uptrend.
Of course, given
the overnight news about the Russian incursion into Ukraine, I would not make
any technical assumptions about the course of today’s pin action. Although I
will add that, in my opinion, Fed policy is by far a more important variable in
determining equity prices than what is going on in Ukraine,
Gold fights off
rising rates and Bitcoin.
And, finally, more
than half the gold mining stocks are not in a bear market.
https://sentimentrader.com/blog/gold-mining-stocks-havent-done-this-for-more-than-a-year/
Fundamental
Headlines
The
Economy
US
The second estimate
of Q4 GDP growth was 7.0%, in line; the price index was 7.2% versus 6.9%; real consumer
spending was 3.1% versus 3.3%.
Weekly jobless
claims totaled 232,000 versus expectations of 235,000.
The January
Chicago national activity index came in at .69 versus consensus of .15.
International
Other
Oil prices and recessions.
https://econbrowser.com/archives/2022/02/predictions-oil-prices-and-recoveries-and-recessions
Architecture billings continue to grow.
https://www.calculatedriskblog.com/2022/02/aia-architecture-billings-continue.html
Inflation
M2 growth continues at a rapid pace.
http://scottgrannis.blogspot.com/2022/02/m2-growth-continues-at-rapid-pace.html
A counterpoint---of sorts.
https://www.capitalspectator.com/inflation-outlook-23-february-2022/
JP Morgan says the risk of much higher
commodity prices is substantial.
Edible oil prices soar.
Geopolitics
Well, I was wrong
in assuming Russia wasn’t going to invade Ukraine. However, I am sticking with my
assumptions about Putin’s objectives with respect to Ukraine and that Ukraine’s
fate is not an existential threat to the US or even the EU. Putin’s objective
all along has been to force the US and NATO to live up to the 1991 agreement (which
I have documented repeatedly in these pages) not to extend NATO eastward. I think
that this article is a good synopsis of the current state of affairs.
https://www.zerohedge.com/geopolitical/mcmaken-russian-weakness-russian-threat-west
Will sanctions hurt the EU more than Russia?
Bottom
line.
Ukraine is not the
problem.
https://alhambrapartners.com/2022/02/21/weekly-market-pulse-ukraine-isnt-the-problem/
Five commodities
that could explode if Ukraine/Russia turmoil escalates.
Earnings estimates
will disappoint as the Fed tightens.
News on Stocks in Our Portfolios
What
I am reading today
The
implications of a four day week.
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