2/24/25
The Market
Technical
The S&P took a shellacking on Thursday and
Friday to finish the week well off its highs. While it remains above all DMAs
and in uptrends across all timeframes, it (1) failed to hold its all-time high
for the sixth time in the last two months and (2) is about to challenge its 50
DMA [~6007]. At the moment, follow though is key. But if it fails to the
downside, important near in support exists at (1) the lower boundary of its
very short term uptrend [~5975] and (2) its 100 DMA [~5941].
Markets rolling over.
https://www.zerohedge.com/the-market-ear/markets-rolling-over
More from JP Morgan.
https://www.zerohedge.com/markets/momentum-rout-extends-second-day-jpmorgan-warns-more-come
TLT appears to be making an equally dramatic turn
in its technicals. It finished (1) Thursday above its 50 DMA, reset it on Friday
from resistance to support and (2) Friday above the upper boundary of its very
short term downtrend; if it remains there through the close today, it will reset
to a trading range. While it remains below its 100 and 200 DMAs and in short term,
and intermediate term downtrends, there is a decent probability that it has
marked that bottom that I have opined that it has been in search of.
Note: the inset at the bottom of the chart is its
relative strength indicator (RSI).
GLD had another great week. But as you can see in
the RSI block at the bottom, it is getting really stretched to the upside on a short
term basis. Somewhat confusingly, neither the gold miners (GDX) nor silver (SLV)
have participated in gold’s upside momentum.
So, any consolidation in GLD could present any opportunity to leg into GDX
or SLV or both.
The dollar continued its downward path (1) resetting
its 100 DMA to resistance from support and (2) commencing a challenge of its
200 DMA (now support). The good news (which is shrinking on a daily basis) is that
it remains in short and intermediate term uptrends and has that massive gap
down open that needs to be filled.
Friday in the charts.
The latest from Goldman’s trading desk.
The latest observations on volatility.
https://www.zerohedge.com/the-market-ear/latest-observations-volatility-markets
The oil market seems to be tuning Trump out.
https://www.axios.com/2025/02/21/oil-markets-trump-stable-price
Fundamental
Headlines
The Economy
The stats last week were overwhelmingly negative as
were the primary indicators (one neutral, three down). In addition, there are
some anecdotal warnings that point potentially at a slowdown/recession---(1) federal
employee layoffs, (2) tariffs and (3) budget cuts which while
positive/necessary in the long run will have a negative impact on economic
growth short term. These factors at best suggest a very weak ‘muddle through’
economy and, at worst, a recession. Since this is the third week in a row of
poor economic data, I am turning on the warning light. That is not a change in forecast,
but it is a signal that one could be coming.
The Tariff Risk Isn't In Inflation (Part II) - RIA
No data on the inflation front. So that part of my
forecast (inflation as good as it is going to get) remains solid.
Overshadowing all of this is the Trump revolution
which keeps the level of uncertainty extremely high---adding to my lack of my
confidence in my forecast.
Overseas, the numbers were very, very positive including
the price data. So, that is something of
an offset to the concerning US stats. It
is also supportive of many of the Street recommendations to add to the
international portion of your portfolio.
Update on Q1 GDP nowcast.
https://www.calculatedriskblog.com/2025/02/q1-gdp-tracking-around-2.html
Consumer growth expectations crash, inflation
expectations soar (stagflation?).
US
The January Chicago Fed national activity index
came in at -0.3 versus estimates of +0.21.
International
January EU CPI was -0.3%, in line.
The February German business climate index was 85.2
versus expectations of 85.8; the February current conditions index was 85.0
versus 86.5.
Fiscal Policy
Student
loan forgiveness blocked.
Recession
Is
employment about to start deteriorating?
https://angrybearblog.com/2025/02/jobless-claims-possibly-the-final-steady-as-she-goes-report
But
so far, consumer credit is in great shape.
https://talkmarkets.com/content/us-markets/credit-delinquencies-below-recession-levels?post=483520
Increasing odds of recession in 2025.
Overnight News
Investing
Margin balances suggest risk is building.
Margin Balances Suggests Risks Are Building - RIA
Did the AI bubble just burst?
Luck versus skill in investing.
Tune out the noise.
https://ritholtz.com/2025/02/tune-out-the-noise/
Solving the income investor’s dilemma.
https://www.advisorperspectives.com/commentaries/2025/02/21/solving-income-investor-dilemma
TIPS are a bargain.
https://www.capitalspectator.com/real-inflation-adjusted-treasury-yields-remain-elevated/
Do bitcoin ETFs belong in your portfolio?
https://talkmarkets.com/content/commodities/do-crypto-etfs-belong-in-your-portfolio?post=483516
Bitcoin, Ether tumble on news of giant hack.
https://www.zerohedge.com/crypto/bybit-exchange-hacked-over-14-billion-steth-moved
News on Stocks in Our Portfolios
What I am reading today
Quote
of the day.
https://cafehayek.com/2025/02/quotation-of-the-day-4927.html
Letters of marque and reprisal.
Let's Go Privateering! - by Glenn Harlan
Reynolds
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