The Morning Call
10/13/25
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The
Market
Technical
The S&P appears to have rolled over on
Friday following Trump’s China tariff threat. ‘Appears’ being the operative
word. It is much too soon to be calling a reversal; as always, follow through
is important. Arguing against a correction is that the S&P is (1) above all
three DMAs, (2) in uptrends across all timeframes and (3) just last week the
Market experts were insisting that the trend was up.
The case for
a correction is (1) the index has busted to the downside through both very
short term uptrends, (2) most visible support is still much lower: [50
DMA~6532, 100 DMA~6310, 200 DMA~6042, the lower boundary of its short term
uptrend~5597] and (3) valuations at near historic highs.
I remain of
the opinion that this is a market to trade (GDX, SH) not invest in long term.
If you do, be sure to have close in stops.
The tariff
rug pull.
https://talkmarkets.com/content/us-markets/tariff-rug-pull?post=527652
October is the
most volatile month of the year.
https://x.com/RyanDetrick/status/1976712530669048225
The latest from
Goldman’s desk.
https://www.zerohedge.com/markets/our-model-says-no-bueno-goldman-credit-traders-say-add-shorts-here
The bond market rallied
on the tariff threat---as would be expected (bonds as a safe haven). TLT has
now made two higher lows and one higher high---a decent sign of some sort of
change in direction. The good news is that it is above all three DMAs. The bad
news is that it is in downtrends across all time frames. You can see the upper
boundary of its short term downtrend. I wouldn’t bet heavily on a change of
direction until that threshold is breached.
Gold continued its
relentless rally, spurred on by Trump’s tariff threat. It has now traded above
the upper boundary of its short term trading range; and there is nothing above
it but blue sky for a long way. In addition, it is above all DMAs. With the
uncertainty factor growing (tariffs, government shutdown, inflation consensus
gaining strength), more upside is likely. I Sold one half of my GDX trading
position last week which now looks dumber than dirt. I will hold the remaining
until any sign of a rollover.
The dollar had a brief
rally last week, terminated by the Trump tariff announcement. It remained above
both its 50 and 100 DMAs; but as you can see, it touched its 200 DMA and faded.
Pundits are all atwitter about a potential turnaround in the dollar. I think
that it is yet unproven.
Friday in the
charts.
https://www.zerohedge.com/markets/trump-tariff-tape-bomb-tanks-stocks-week-bonds-bullion-bid
More charts.
Friday in the
technical stats.
https://www.barchart.com/stocks/momentum
https://www.barchart.com/stocks/sectors/rankings
https://www.barchart.com/stocks/signals/new-recommendations
Fundamental
Headlines
The
Economy
With the
government shutdown, there were very few stats released last week. What was produced
was all negative. But I don’t look at that as anything but noise. Overseas, the
indicators were balanced with one inflation datapoint which was neutral.
So, there is no reason
to alter my ‘muddle through’ forecast. There was, however, a bevy of inflation
warnings which makes me feel better about my ‘inflation is as good as it is
going to get’ call. That said, absent any current confirming data, my strength
of conviction on this part of my forecast remains weak.
Five under the
radar inflation gauges.
https://www.advisorperspectives.com/commentaries/2025/10/10/5-inflation-gauges
US
International
The September
Chinese trade balance was $90.5 billion versus forecasts of $96.0 billion.
September German
PPI came in at +0.2% versus predictions of -0.1%.
Other
The week ahead.
ECONOMIC
WEEK AHEAD: October 13 - 17
First production, then consumption.
Consumer sentiment stalls in October.
Americans falling behind in their car payments.
The latest Q3 nowcast.
https://www.capitalspectator.com/gdp-nowcasts-still-indicate-solid-us-growth-for-q3/
Another nowcast.
https://talkmarkets.com/content/us-markets/the-big-picture-nowcast-and-forecast?post=527654
Monetary
Policy
How the money printing world has reversed.
https://wolfstreet.com/2025/10/09/amazing-how-the-money-printing-world-has-reversed/
Fiscal
Policy
Soaring gold prices are a warning to both
sides in Washington.
Substantial government layoffs have begun.
https://www.zerohedge.com/political/substantial-government-layoffs-have-begun-vought
Tariffs
The tariff war with China goes hot.
https://www.zerohedge.com/markets/stocks-tank-trump-threatens-massive-increase-tariffs-chinese-goods
Goldman’s analysis.
Investing
Gold is not a risk free investment.
The dangers of passive investing.
https://www.apolloacademy.com/the-dangers-of-passive-investing/
Is private credit drowning in capital?
Ray Dalio interview.
Update on Q3 S&P earnings.
https://talkmarkets.com/content/us-markets/sp-500-earnings-dashboard-25q3?post=527648
Spotlight on hubris.
https://microcapclub.com/the-spotlight/
The stock market rally is on borrowed time.
https://www.zerohedge.com/markets/stock-rally-borrowed-time-bad-news-becomes-good
Look out below.
https://www.zerohedge.com/personal-finance/look-out-below
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-gold-6000-next-spring
Crypto carnage.
Wall
Street sees wild earnings season.
https://www.zerohedge.com/markets/wall-street-sees-one-wildest-earnings-seasons-years
News on Stocks in Our Portfolios
Fastenal press
release (NASDAQ:FAST): Q3 GAAP EPS of $0.29 misses by $0.01.
Revenue of
$2.13B (+11.5% Y/Y) in-line.
Fastenal (NASDAQ:FAST) declares $0.22/share quarterly dividend, in line with previous.
What
I am reading today
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