2/10/25
The Market
Technical
Despite volatility in individual issues, the
S&P finished the week about even with the prior Friday closing. It opened down
big on Monday, recovered Tuesday through Thursday then sold off again on Friday---an
almost exact repeat of the prior week’s pin action. The S&P made its fifth
attempt to get through its all-time high and failed---leaving it with two very
short term lower highs. On the other hand, it is above all DMAs and in uptrends
across all timeframes. This is a time to sit on your hands and let the Market
tell you what it is going to do: make a new high or start taking out support
levels.
TLT is doing its best to stage a recovery. It
traded up to the upper boundary of its very short term downtrend as well as its
50 DMA but failed to successfully challenge either. So, it remains below all DMAs
and in very short term, short term, and intermediate term downtrends. I
have said several times over the last weeks that TLT is a market in search of a
bottom. That remains the case.
Houston, we have lift off. Gold pushed through its all-time
high with little effort and moved steadily upward. As I noted, there is nothing
overhead but space, so, I am not venturing an upside objective. Clearly my GDX sale
was a bit early---but I was in it for a trade and made money. The thing to do
now is wait for anther good entry point.
Are the Chinese about to reenter the gold market?
https://www.zerohedge.com/precious-metals/why-chinese-gold-mania-may-be-starting
The dollar was down on the week, after making a
second lower high but remains in a see saw pattern between its 50 and 100 DMAs going
back to early January. The good news is that it is above its 100 DMA (for the
moment, at least), remains above its 200 DMA, is in short and intermediate term
uptrends and has that massive gap down open that needs to be filled.
It
seems likely that this pin action is all related to the uncertainty being
created by Trump’s policy blitzkrieg. It will probably stay that way until
there is clarity on that issue.
Friday in the charts.
Goldman’s trading desk’s summary of last week’s
pin action.
Fundamental
Headlines
The Economy
The stats last week were again modestly to the upside
although the primary indicators were quite negative (one up, three down). Overseas
the data was very positive. So, stats continue to track a ‘muddle through’
scenario. There were no inflation numbers, so no change there. In short, economy
is performing pretty much as I have expected.
Trump remains the center of attention and will likely
continue to do so for most of year. I love that he is shaking up the financial
and political environment/establishment; and by and large, I think what he has
done is a net plus for the economy/corporate earnings. But it keeps the
uncertainty higher than I would like.
Bottom line: there is nothing in the data that
raises a doubt on my the economy ‘muddles through’ and inflation is as good as
it is going to get scenarios.
US
International
Other
Revisions to the nonfarm payroll data.
https://bonddad.blogspot.com/2025/02/january-jobs-report-annual-revisions.html
This week’ economic calendar and what to
expect.
This
analyst is a bit too pessimistic; but his point is something to keep in mind.
https://www.zerohedge.com/political/danger-deep-worldwide-recession-2025-ed-dowd
Overnight News
Trump on Sunday said the US would impose 25%
tariffs starting Mon on steel and aluminum imports, with his reciprocal tariff
announcement arriving Tues or Wednesday.
US House Republican leaders are looking to cut
federal spending by USD 2tln to USD 2.5tln, according to Punchbowl sources.
House GOP negotiators now believe they will have to dig deeper into Medicaid
spending to meet those targets. Punchbowl believe Washington is drastically
underestimating the chance for a government shutdown after March 14.
Trump said he instructed the Secretary of the US
Treasury to stop producing new pennies which is wasteful, while he suggested
tearing the waste out of the US budget, even if it's a penny at a time:
Trump’s acting head of the consumer finance
watchdog told staff to stop pending investigations and supervisory activities
of banks.
Monetary Policy
Part
of the reason the Fed can’t get its forecast right is it inability to forecast.
https://www.zerohedge.com/markets/forecasting-error-puts-fed-wrong-side-again
Tariffs
More tariffs
coming.
https://www.ft.com/content/959780f5-e1c0-4264-b73b-45995b4dfa7d
Reasons
not to be concerned about tariffs.
Introducing
Tramp’s trade nominee.
Investing
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-going-long-big-trade
Trump’s crypto appointees are supercharging
the Market.
Broken markets hold back Europe.
News on Stocks in Our Portfolios
What I am reading today
Fish
oil’s positive impact on aging.
https://www.zerohedge.com/medical/daily-omega-3-supplements-may-slow-down-aging-study-finds
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