The Morning Call
3/21/22
The
Market
Technical
It
was a very upbeat week for the S&P: (1) it bounced off the 23.6% Fibonacci
retracement level for a third time and (2) is now challenging the upper boundary
of its short term downtrend; if it remains there through the close today, it
will reset to a trading range. So, it
appears that the worst is over, at least for the time being. However, its 100 and 200 DMAs are immediately
overhead and that is a lot of resistance to get through. I wouldn’t do anything until we know how it
handles those DMAs.
The death cross
from hell.
https://www.zerohedge.com/the-market-ear/cdtozquxf
For the bulls.
https://www.zerohedge.com/markets/goldman-trader-capitulation-complete-pain-trade-now-upside
For the bears.
From record
selling to record buying.
https://www.zerohedge.com/markets/record-selling-panic-buying-week-hedge-fund-history-books
The long bond
couldn’t hold the lower boundary of its short term trading range and reset to a
downtrend. That is not surprising given
the latest developments out of the Fed. It
still has a way to go before challenging its intermediate and longer term
uptrends; but for the moment, the direction is down. Short term, it needs to fill that gap down
open.
Gold continued its
sell off from the prior week---again not surprising in the face of higher
interest rates. Still, it is in uptrends
across all timeframes and above both DMAs.
So, until something breaks, the assumption is that the trend remains to
the upside.
The dollar’s chart
remains the healthiest of the lot, despite a minor sell off last week. My
assumption remains that irrespective of what happens, investors continue to believe
that the dollar is a safe place to be.
Friday in the
charts.
https://www.zerohedge.com/markets/stocks-squeeze-best-week-2020-election-fed-cranks-hawkishness-11
Fundamental
Headlines
The
Economy
Review of last Week
Last week was another
relative slow one with regards to economic data. In the US, the results though
were quite downbeat with two neutral and two negative primary indicators. Overseas stats were mixed.
So, my outlook remains: the economy is struggling to grow, hampered
by irresponsible monetary and fiscal policies, getting no support from the
global economy and threatened by (1) seemingly mounting inflationary forces and
(2) continued supply chain disruption as a result of the conflict in Ukraine.
Predicting the
next recession.
https://www.calculatedriskblog.com/2022/03/predicting-next-recession.html
The main nondata headline
last week was the FOMC meeting, which I have already covered. But in sum, the Fed has finally decided to
start to wind down its enormously irresponsible easy money policy; indeed, at a
faster pace than Market participants had expected. The driving force behind that move being its
assessment that the economy is strong and needs to be tamped down. As you know, I think the Fed is completely wrong
in its assessment---given its history of constantly being behind the
curve. Jeffrey Snider agrees:
QE is over---until
it is not.
https://www.advisorperspectives.com/commentaries/2022/03/18/feds-qe-is-over-until-it-comes-back
Fed governor goes
full hawk.
US
The February Chicago
national activity index was reported at .51 versus estimates of .75.
International
February German PPI came in at 1.4% versus
forecasts of 1.7%.
Other
Update on big for economic indicators.
The coronavirus
CDC revises covid death stats down significantly.
https://www.zerohedge.com/covid-19/cdc-removes-24-percent-child-covid-19-deaths-thousands-others
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