The Morning Call
3/28/22
The
Market
Technical
The
S&P had another good week and continues to challenge major resistance
levels. It is now pushing through its
200 DMA; if it remains there through the close on Tuesday, that DMA will revert
to support. It is also near a challenge
of its 100 DMA. Were that to prove
successful, then the next stop is its all-time high. Stay patient.
From Wall Street’s
biggest bear.
https://www.zerohedge.com/markets/wall-streets-biggest-bear-lays-out-how-invest-new-world-order
The carnage in the
long Treasury continues; however, it is nearing the lower boundary of its
intermediate term uptrend which should provide some strong support. The $64,000 question is, when will long bond
investors switch from being concerned about a tightening Fed to worrying about
a recession? Perhaps the technical
junction at TLT’s intermediate term uptrend’s lower boundary will cause some reflection
on that point. I am not saying the worst
is over. I am saying that I wouldn’t be
selling bonds until I knew the outcome of any challenge of that boundary.
Gold managed an
advance on the week, continuing its recovery from that steep selloff in early
March. As I said last week, it is not
acting like interest rates are going higher; though I would always put my money
of the bond market versus gold to give directional
information (see above). 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 recovered
from the prior week’s selloff and its chart remains the healthiest of the lot. 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-gold-oil-surge-week-yield-curve-carnage-screams-recession
Fundamental
Headlines
The
Economy
Review of last Week
Last week the
economic data were weighed very slightly to the upside but the primary
indicators were solidly negative.
Overseas stats were positive.
None of this
alters my outlook: 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 disruptions because
of the conflict in Ukraine.
Worth mentioning
is that in a speech, Powell doubled down on the Fed’s new hawkish stance on monetary
policy. That clearly will have a
dampening effect on economic activity, supporting my forecast.
Rate hike starts
countdown to next recession.
US
International
Other
Demand destruction has begun.
https://www.zerohedge.com/markets/demand-destruction-has-begun
Geopolitics
Another history lesson from David
Stockman.
Bottom
line.
Bear market
squeeze?
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