Monday, April 28, 2025

Monday Morning Chartology

 

 

4/28/25

 

 

The Market

         

    Technical

 

Finally, a decent week of technical action for a change. The S&P was up (1) made its first higher low [hopefully confirming April 7th as The low] and (2) broke above both the 23.6% Fibonacci retracement level as well as the downtrend off its February 19 high. If it remains there through the close on Tuesday those breaks will be confirmed. On the other hand, (1) in the process, it created a large gap up open which will need to be filled and (2) it remains below all DMAs.  All in all a ray of hope that the worst is over. If we get some follow through to the upside, then I will likely put some money to work on the next pullback. I did add to my Nike position at the close on Friday.

 

The latest from Goldman’s trading desk.

https://www.zerohedge.com/markets/top-gs-trader-we-just-saw-market-action-signals-upside-tipping-point-we-still-need-3-things

 

 

 


 

The long bond made some additional progress in its bounce off the lower boundary of its short term trading range. ‘Some progress’ being the operative words. It can certainly be argued that the bounce represented a successful test of the January 14th low. In light of the better performance from the S&P, I am taking it as such but the obstacles they both have to overcome, i.e., tariff chaos, inflation fears, declining dollar are more impactful on TLT than the S&P. So I am less confident in any recovery.

 

 

 

 


 

 

GLD was off for the week. But it was so stretched to the upside that some correction was inevitable.  So I don’t think a down week is anything to get nervous about. It remains well within a very short term uptrend and in uptrends across all other time frames as well as above all DMAs. Let’s see where the correction goes but for the moment, I would stay with what works.

https://www.zerohedge.com/precious-metals/case-tactical-gold-pullback-nomura

 



 

 

The dollar was up with everything else; although its rally was even less impressive than that of the long bond. The good news is that Trump’s attempt to oust Powell is off the table. Unfortunately, with the rest of the world pissed off at Trump over the tariff chaos, I’m not sure pressure won’t continue on the dollar. And remember, if Trump were to get his way and our trade deficit shrunk, that would be bad news for the dollar. So, I am having a tough time seeing any reason for a longer term recovery in the dollar.

 


 


            Friday in the charts.

            https://www.zerohedge.com/market-recaps/deal-or-no-deal-stocks-bonds-bitcoin-bid-week-world-questions-us-china-talks

 

    Fundamental

 

       Headlines

 

              The Economy

 

Last week, the stats were tilted to the negative side, including the primary indicators (two up, three down). So another (second in a row) week of downbeat data---though not enough to signal recession---but enough to suggest ‘muddle through’.

 

The big news of the week was the Trump Blink: (1) backing off the threat to fire Powell and (2) moving to defuse his China standoff.

 

As to the latter, we now know for sure that there is a Trump Put and roughly at what level it exists. That is almost certainly a positive short term. Longer term, he could have saved everyone a lot of grief if he hadn’t insisted on pursuing a hard guy, ‘art of the deal’ strategy and just focused on the specific areas of inequity. We can only hope that maybe, just maybe, some good will come of his (to date) inexplicably illogical tariff policy meanderings.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5210267

 

World finance ministers are dazed and confused.

https://www.bloomberg.com/opinion/articles/2025-04-25/trump-s-tariffs-world-s-finance-ministers-and-central-banks-are-dazed?srnd=homepage-americas&sref=loFkkPMQ

 

To be sure, I don’t fault the Donald for working to right some trade imbalances. But so far, I would judge the ‘art of the deal’ to be a f**king disaster; and unfortunately, likely a longer term negative (1) for our relations with our allies and (2) in his ability to implement his domestic agenda [which I believe would be a major plus for the economy].

https://talkmarkets.com/content/global-markets/the-calm-before-the-crack-tariff-fallout-enters-the-real-economy-phase?post=493435

 

Bottom line. Short term, the odds of recession have likely decreased, but longer term though Trump’s self-induced chaos will only hamper economic growth. Nonetheless, I am reinstating my ‘muddle through’ forecast. I am less sure about inflation and I am leaving that prediction in abeyance pending more clarity.

 

                        US

 

                        International

 

                        Other

                       

                          Consumer sentiment falls for fourth straight month.

https://www.advisorperspectives.com/dshort/updates/2025/04/25/consumer-sentiment-falls-for-fourth-straight-month-as-inflation-expectations-soar

 

                        Overnight News

 

  US Treasury Secretary Bessent said he had interaction with his Chinese   counterpart in Washington last week and thinks the Chinese will see the tariff level as unsustainable and he also thinks there is a path to an agreement with China on tariffs, according to ABC News. It was separately reported that Bessent had met with Japanese Finance Minister Kato on Thursday and held productive discussions across a broad range of bilateral issues including reciprocal trade, while he was said to be encouraged by discussions with South Korean officials that focused on an ‘expanded equilibrium’ which encourages rather than restricts trade.

 

China has reportedly quietly exempted some US-made products from tariffs with Beijing said to have been canvassing companies and waiving duties on US goods in sectors where there is a lack of alternatives, according to WSJ.

 

Fox’s Gasparino posted on X that the Trump Administration would like to roll out trade deals this week, at least the outlines that have been agreed upon, citing sources close to the matter.” However, he also noted there are a lot of moving targets that could delay matters, while the deals on deck include India, Japan and maybe South Korea and Australia, although the White House spokesperson didn’t respond to a request for comment.

           

            Fiscal Policy

 

              Red light blinking in US Treasuries market.

              https://talkmarkets.com/content/us-markets/red-warning-light-blinking-in-us-treasury-market?post=494474

 

      Investing

 

            Update on Q1 earnings dashboard.

            https://talkmarkets.com/content/us-markets/sp-500-earnings-dashboard-25q1-friday-april-25?post=494473

 

            Your memories can deceive you.

            https://www.wsj.com/finance/investing/the-mistake-youre-making-in-todays-stock-marketwithout-even-knowing-it-8549894e?st=SDgx2k

 

            The latest from BofA.

            https://www.zerohedge.com/markets/sell-rips-hartnett-says-3bs-saved-market-now-its-all-3cs

 

            Ten rules from legendary investors.

            Speculator Or Investor? 10-Rules From Legendary Investors - RIA

 

            The logic based approach to volatility.

            Spock And The Logic Based Approach To Volatility - RIA

 

    News on Stocks in Our Portfolios

 

What I am reading today

 

           

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