11/4/24
The Market
Technical
The inevitable happened this week---the S&P
ceased ‘rollin’ along, breaking a short term uptrend off last August’s low. It
did so on a gap down open which holds a positive in that that gap has to be
closed. It also traded down to its 50 DMA and bounced, another plus. Still we
are going into an emotionally charged week that could potentially lead to a post-election
level of civil strife we have never witnessed in the US.
That said, the Market, which is generally an
excellent discounting mechanism, seems unbothered by the likelihood of turmoil.
Which strongly suggests to me that my concerns are way overblown. Nonetheless, with
the potential for political uncertainty as well as the extraordinarily
confusing pin action in bonds, gold, and the dollar, I think that caution is
the better part of valor.
The election cometh.
The Presidential Election Cometh - RIA
Trading lessons from US elections.
https://www.ft.com/content/cdeb79b5-3244-4c77-9541-20614818224d
Probably not a good sign.
https://www.ft.com/content/61a7e376-5ad4-4d58-bbbb-1b443ab69591
The latest from BofA.
https://www.zerohedge.com/markets/harnett-most-contrarian-post-election-trade
The long bond continued its losing ways. However,
it did bounce off the lower boundary of its very short term trading range,
providing a glimmer of hope that the current sell off is coming to an end. On
the other hand, it could be that it is the bond investors who are correctly
discounting the potential for post-election turbulence---and if that is the
case, then expect more downside.
GLD was down for the week. But, at this point, it
is nothing more than a minor hiccup. Momentum remains to the upside and my
position on gold remains the same: I don’t understand how the price action of
gold can be so positive at the same time that interest rates and the dollar are
soaring, barring some catastrophic economic/political/military event---which unfortunately
seems (in my opinion) all too likely.
My thoughts on the dollar are unchanged:
Despite a minor selloff on Wednesday and Thursday,
the dollar continues to shoot the moon---not suggesting but shouting
that investors think that either something enormously positive is occurring or
about to occur in the US or that something enormously negative is occurring or
about to occur internationally. We can all speculate on what those may be but
if they don’t happen it seems likely that some retracement is to be expected.
Stocks and
the dollar versus bonds and gold.
Friday in the charts.
Fundamental
Headlines
The Economy
Week
of review
The economic stats last week were positive as were
the primary indicators (three plus, one neutral, two minus). That pretty much
fits my ‘muddle through’ scenario. Though I would caution that data over the
next month will be distorted by the impact of the two Florida hurricanes.
The US inflation numbers were neutral but overseas
(which in total was upbeat) the price data was disappointing---which, as you
know, fits my forecast.
…. unless and until somebody in Washington
realizes the inflationary implications of the current horrendously irresponsible
fiscal policy, I believe that either the Fed will have to finance that
policy---meaning that higher inflation is an inevitability---or it
won’t---meaning the federal government will suck capital out of the private
sector, stagnating economic growth.
My forecast remains: (1) the economy ‘muddles
through’ and (2) inflation has likely seen its lows.
Having said all that, this week’s news flow will
likely be dominated by the election and its aftermath, particularly the latter.
No election in my memory has been as contentious and the threats of violence by
the losing side so numerous. We can all hope and pray that constitutional
process will work as it’s intended; but I fear the loss of civility and its effect
on the Market. Hope for the best, be prepared for the worst.
https://www.zerohedge.com/political/portents-chaos
The
election litigation is getting scary.
https://www.zerohedge.com/political/halloween-over-election-litigation-getting-really-scary
US
International
Other
September median household income.
https://politicalcalculations.blogspot.com/2024/11/median-household-income-in-september.html
News on Stocks in Our Portfolios
T. Rowe Price (NASDAQ:TROW) declares $1.24/share
quarterly dividend, in line with previous.
What I am reading today
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