Monday, August 25, 2025

Monday Morning Chartology

 

 

8/25/25

 

The Market

         

    Technical

 

The S&P once again traded below the newly re-established uptrend off its April lows. Then, in a mighty effort on Friday attempted to recover the trend but failed. That is not to say that it won’t. Clearly, investors got jiggy with Powell’s Jackson Hole speech; and barring a negative news event, it seems likely that there will be follow through to the upside. Supporting that notion is that the index is (1) above all three DMAs and (2) in uptrends across all timeframes. That said, I continue to be worried about valuation levels. This is a market to trade not invest in long term. If you do, be sure to have close in stops. I still hold GDX and ETH as trades.

 

Chart of the week.

https://entrylevel.topdowncharts.com/p/chart-of-the-week-the-best-vs-worst

 

Where are the bulls?

https://www.zerohedge.com/the-market-ear/where-are-bulls

 

If you see a bubble, ride it.

https://www.zerohedge.com/the-market-ear/if-you-see-bubble-ride-it-1

 


 

 

TLT rallied on the week and not just because of Powell’s Friday gift, in the process recovering above its 50 DMA (now resistance; if remains there through the close today, it will reset to support) and closing right on its 100 DMA (now resistance). Nevertheless, (1) it remains below its 200 DMA and in downtrends across all timeframes and (2) its bounce on Friday was considerably less enthusiastic than that of equities. That suggests that inflation remains a bigger concern to the bond guys than your friendly stock jockey.

 

 

 


 

 

 

After being flat from Monday through Thursday, GLD rallied on Friday to close up on the week, ending back above its 50 DMA (now resistance; if it remains there through the close today, it will revert to support). While it remains above its 100 and 200 DMAs and is in uptrends across all time frames, it still needs to make a higher high before I feel comfortable that the uptrend is intact.

 




The dollar clearly didn’t like Powell’s dovish move, plunging back below its 100 DMA and breaking the very short term uptrend off its 7/1 low. While it is not an encouraging chart, it does have three near in support levels (the 50 DMA, the lower boundary of a very, very short term uptrend and the lower boundary of its short term trading range) that could help it construct a double bottom. That notwithstanding, like GLD, it doesn’t seem to be buying the stock boys’ enthusiasm over the prospects of a rate cut. I remain hard pressed to think that the worst is over.

 

 


 

 

            Friday in the charts.

                https://www.zerohedge.com/market-recaps/dovish-powell-drives-dollar-dump-panic-buying-across-risk-assets

 

            Friday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/sectors/rankings

 

    Fundamental

 

       Headlines

             

              The Economy

                       

The stats last week were mixed (for the second week in a row) though the primary indicators were positive (one plus, one neutral) with no price measures. Overseas, the data was very upbeat including three positive inflation readings.

 

So, the numbers were supportive of my ‘muddle through’ scenario. My ‘inflation is as good as it is going to get’ forecast---not so much.

 

Of course, the week was dedicated to guessing what Powell would say Friday morning at the Jackson Hole conference. And he didn’t disappoint.  The narrative was dovish resulting in spike in both the odds of September rate cut and the Market.

 

It also increases the likelihood that both legs of my outlook will come to fruition. Short term, I remain in the ‘muddle through’ camp. Longer term, inflation is as good as it is going to get’ and, indeed, with the onset of tariffs and the deficits from the BBB, it could become an even larger problem than I previously thought.

 

US

                       

                          July building permits fell 2.2% versus estimates of -2.8%.

 

The July Chicago national activity index came in at -0.19 versus expectations of -0.2.

 

                        International

 

The June Japanese leading economic indicators were reported at 105.6 versus projections of 106.1.

 

The August German business climate index was 89.0 versus consensus of 87.0; the July current conditions index was 86.4 versus 86.6.

 

                        Other

                       

                          Update on Q3 nowcast.

                          https://www.capitalspectator.com/us-gdp-nowcasts-continue-to-indicate-slower-q3-growth/

                                                 

                          More.

                          https://www.calculatedriskblog.com/2025/08/q3-gdp-tracking_22.html

 

                          Not so fast.

                          ECONOMIC WEEK AHEAD: August 25-29

 

                        Overnight News

 

Despite Powell’s speech, clear divisions remain among Fed officials. The St. Louis Fed’s Alberto Musalem said he’ll need more data, Reuters reported, while Chicago’s Austan Goolsbee pointed out he’s still more concerned about the inflation side of their mandate than employment.

 

 South Korea's President Lee said they will ultimately arrive at a reasonable trade deal with the US and he expects to discuss with US President Trump security and defense costs, as well as tariff negotiations.

 

India’s Foreign Minister said trade negotiations are still going on and they have lines to maintain and defend, while he added the lines India cannot cross are the interests of farmers and small producers. Furthermore, he said India buying Russian oil was never brought up before the public announcement of tariffs and issues about buying Russian oil are not being used to target other major users such as China and the EU.

 

                        Fiscal Policy

 

                          If the new BLS head is as bad as his critics say, that is a win.

                          https://www.realclearmarkets.com/articles/2025/08/22/if_ej_antoni_is_as_bad_as_his_critics_say_we_all_win_1130350.html

 

                                                  Three economists discuss current economic issues.

                          https://www.nytimes.com/2025/08/21/opinion/trump-economy-tariffs-data.html

 

This is the good news side of the BBB. But the author fails to mention its impact on the deficit/national debt.

https://thehill.com/opinion/finance/5462354-expanding-economic-opportunity-law/

 

                          And speaking of the deficit/debt (which I wish I wasn’t).

https://investorsobserver.com/news/treasury-secretary-bessent-is-gaslighting-the-american-people-on-tariff-revenue-as-government-debt-runs-wild-analyst-says/

 

                          What if Treasuries are no longer a safe haven?

                          https://mrzepczynski.blogspot.com/2025/08/what-if-treasury-bonds-are-not-safe.html

 

                          Mimicking China is not the way to win the race against China.

  https://www.aei.org/articles/mimicking-china-isnt-how-the-us-should-race-against-china/?mkt_tok=NDc1LVBCUS05NzEAAAGccDIPwaNDHxjnZQX0gVkpDACMPVZKpjkqYH36JirelKaxOqUVTiwQWmYrjv56rL9B-TPZeIxrn5JG-y0P65ZE3uofLEr-bewU2HzXPNlNUvHsu3M

 

 

      Investing

 

            Is value investing making a comeback?

            https://www.advisorperspectives.com/commentaries/2025/08/22/value-investings-comeback

 

            How long can this lopsided market continue to prosper?

            https://www.nytimes.com/2025/08/22/business/stock-market-nvidia-trump.html

 

            Update on Q2 S&P earnings.

            https://talkmarkets.com/content/us-markets/sp-500-earnings-dashboard-25q2-friday-aug-22?post=517404

 

            The downside to private equity.

            https://www.wsj.com/finance/investing/the-ivy-league-keeps-failing-this-basic-investing-test-747c8b8c?st=VXH8tH&reflink=desktopwebshare_permalink

 

            Bubble risks grow in Chinese market.

            https://www.zerohedge.com/markets/bubble-risks-grow-chinas-bull-run-defies-angst

 

            In Europe, not so much.

            https://www.zerohedge.com/the-market-ear/things-can-only-get-less-worse-long-trade-europe

 

   News on Stocks in Our Portfolios

 

What I am reading today

 

            Monday morning humor.

            10 Ways Babies Are Smarter Than Liberals | Babylon Bee

 

            What is Alpha School?

            Cash Transfers Fail? - by Arnold Kling - In My Tribe          

 

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