5/20//24
The Market
Technical
The S&P had another good week, pushing above
the upper boundary of its short term uptrend as well as its former all-time
high. The only visible resistance now is the upper boundaries of its
intermediate term uptrend (~6800) and long term uptrend (~7100). I am not
suggesting those as reasonable near term targets; just pointing out the
potential upside. Undoubtedly, there will be much back and forth before either
of those levels are reached. Still, there is nothing else to shoot for.
Money market assets rise to highest level in a
month.
Retail has engaged.
https://www.zerohedge.com/markets/forget-fomo-fomu-back-goldman-flows-guru-says-retail-has-engaged
Smells like a summer rally.
https://www.zerohedge.com/the-market-ear/smells-summer-rally
The big VIX short.
https://www.zerohedge.com/the-market-ear/3-extreme-volatility-charts-we-are-watching-big-vix-short
With the investor world amped up by the promise of
lower rates, it is not surprising the long bond had a positive week. The good
news is that it successfully challenged its very short term uptrend, resetting
it to support. The bad news is that it remains (1) below its 100 and 200 DMAs,
(2) in downtrends across all timeframes and (3) its advance stopped dead in its
tracks where the upper boundary of a very short term downtrend [in this case,
the red line] and the 200 DMA converge. Getting through that dual resistance
level should take some time and effort. If it is successful, then it is probably
safe to assume that price [rates] are headed up [down]. That needs to happen before
a bet on bonds makes sense.
Bonds trigger a tactical buy.
https://allstarcharts.com/bonds-trigger-a-tactical-buy/
GLD finished above its former closing high, reestablishing
a very short term uptrend and opening the way for higher prices. Like the
S&P, there is little visible resistance save for the upper boundary of its
long term uptrend which is so far away as to be unthinkable except in the very,
very long term. That said, the question now is where will gold find resistance?
Given my concern about the current irresponsible fiscal and monetary policies,
my vote is clearly higher. I added to my GDX (gold miners ETF) trading position
on Friday.
Is gold’s run done?
https://investorplace.com/smartmoney/2024/05/gold-is-2024-leader-but-is-run-done/
Probably not.
https://www.zerohedge.com/markets/momentum-its-favor-gold-has-potential-head-higher
The dollar was down on the week (at last getting in
step with the long bond and gold). It successfully challenged its 200 DMA (now
resistance) but held firmly at the lower boundary of its very short term
uptrend and 50 DMA. Let’s see if it holds.
Friday in the charts.
https://www.zerohedge.com/markets/dismal-data-sparks-dollar-dump-everything-else-rips-week
Fundamental
Headlines
The Economy
Week
in review
Last week’s stats were negative as were the primary
indicators (two plus, three minus). The center of attention was the inflation data
which was mixed (PPI negative, CPI positive); but consensus was that the PPI
wasn’t as bad as CPI was good. So, everyone got jiggy.
Not me. I continue to believe that inflation is as
good as its going to get absent a more fiscally responsible congress and less
compliant Fed. Clearly, I don’t believe the ‘higher for longer’ storyline the
Fed is trying to sell.
Fears of recession took a back seat despite the
dataflow---which doesn’t concern me since I don’t think that a recession is in
the cards, at least in the short term. And in the absence of a negative turn in
the employment stats, I am sticking with the ‘muddle through’ scenario.
Bottom line:
(1)
as long as the government pursues its current
spend, spend policy, I don’t see us making any further progress in lowering the
inflation rate. Indeed, I don’t think that the Fed has any choice but to
continue monetizing the government IOUs.
Congress’s
bipartisan spending addiction.
(2) the economy seems
to be returning to its pre-covid sluggish growth path---the result primarily of
the ‘crowding out’ effects of irresponsible government spending/financing.
Barry Ritholtz
argues that all is well.
https://ritholtz.com/2024/05/what-stagflation/
US
International
Other
Recession
Recession
Alert weekly leading economic index.
Bottom line.
Bad news is good news.
Bad News Is
Good News As Markets Set Record Highs - RIA (realinvestmentadvice.com)
News
on Stocks in Our Portfolios
What I am reading today
Monday morning humor---your tax
dollars at work.
https://www.zerohedge.com/political/waffle-house-chaos-ensues-fiery-house-catfight
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