The Morning Call
Including
four must read articles
11/17/25
The
Market
Technical
The S&P (1) tried to break below its 50
DMA for the second time in as many weeks---failing both times and (2)
challenged the very short term uptrend off its May low for the second time in
as many weeks. This time it failed to regain that uptrend. So the question for today
is, will it trade back above that short term uptrend and re-establish its
momentum or will it test the 50 DMA again? My guess is that it will be the
former, but I wouldn’t bet on it. Being above all three DMAs and in uptrends
across all major timeframes certainly gives weight to that judgment. Nonetheless,
the index as presently vulnerable to a reversal. Follow through.
All in all, I
remain of the opinion that this is a market to trade not invest in long term.
If you do, be sure to have close in stops.
Margin debt
continued to climb in October.
Nobody
in control.
https://www.zerohedge.com/the-market-ear/wrap-nobody-control
Goldman: S&P
6725 important.
The TLT had a bad
week and a miserable Friday, undoubtedly related to shrinking odds of a
December rate cut. It reset its 50 DMA to resistance and could challenge both
its 100 and 200 DMAs if the pessimism around the rate cut continues. In
addition, it is in downtrends across all time frames and has yet to mount a
serious challenge of the upper boundary of its short term downtrend. I wouldn’t
bet heavily on a change of direction until that threshold is breached.
Gold resumed its
aggressive selloff. Though it remains above all three DMAs and in uptrends
across all timeframes. So it could be in for more consolidation and still not
pose a threat to reverse its upward momentum. I am still contemplating re-establishing
my trading position in GDX, but gold is going to have to show more life before
I do.
The dollar faltered last week and in the process broke a
very short term uptrend off the September low. I speculated that the worst
could be over---clearly ‘could be’ were the operative words. The good news is
that it remains above all DMAs.
Friday in the
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
Bitcoin oversold.
https://www.zerohedge.com/the-market-ear/bitcoins-oversold-hated-and-sitting-support-perfect
The bullish case.
https://www.zerohedge.com/the-market-ear/ai-gdp-and-bull-forgot-breathe
Fundamental
Headlines
The
Economy
Very few US stats reported
last week. What we got was upbeat, but with no inflation data. Overseas, the
indicators were quite positive with two neutral and one negative inflation
number.
So, my ‘muddle
through’ forecast remains on hold, though concerns over the lack of data
accelerated markedly. I am also sticking with the ‘inflation is as good as it
is going to get’ call supported by the international trends as well as an
increasingly pessimistic view by the Street.
Of course, the big
event of the week was the vote to reopen the government. We don’t have any data
yet, but its anticipation has investors in a tizzy---worrying about both
lagging employment and higher inflation. The uncertainty will get resolved
shortly but we only have educated guesses as to what the numbers will be. And
as I alluded to above, the concern is that they are negative on both counts. Patience.
Data fog may never
be lifted.
Also worth
mentioning is the sudden concern about (1) the ability of the AI related
companies to finance the necessary infrastructure build out as well and the
ancillary energy projects needed to sustain their operation as well as (2)
their future profitability. Unlike the data deficit, those answers are a lot
more elusive. How investors handle these issues will likely determine the
Market’s longer term direction.
How long this
lasts is anyone’s guess. But my yellow light is flashing and as I noted above,
I am starting to pay close attention to potential support levels.
US
The November NY
Fed manufacturing index was 18.7 versus estimates of 7.0.
International
Other
The week ahead.
ECONOMIC
WEEK AHEAD: November 17-21
Overnight
News
Japan’s economy
shrank at an annualized rate of 1.8% in the latest quarter, as US tariffs hit
exports and housing investment plunged ahead of a major stimulus package
expected this month to boost the struggling economy. The decline in real GDP
for July to September period was less severe than economists’ median forecast
of 2.5%.
The euro-area
economy will maintain its moderate expansion, with output rising 1.3% in 2025,
1.2% in 2026 and 1.4% in 2027, European Commission forecasts showed. Inflation
is seen sticking close to the ECB’s 2% target over the next two years.
Fiscal
Policy
The government enablers.
https://www.wsj.com/opinion/the-gops-government-enablers-d7191b0c?mod=hp_opin_pos_2
The student loan shock.
https://bonddad.blogspot.com/2025/11/the-student-loan-shock.html
Visualizing the world’s $111 trillion in
government debt.
https://www.zerohedge.com/markets/visualizing-worlds-111-trillion-government-debt-one-giant-chart
Recession
The coming 2026 boom.
https://assets.realclear.com/files/2025/11/2800_isv251107americanboom.pdf
Goldman sees brighter outlook for housing in 2026.
https://www.zerohedge.com/markets/goldman-sees-brighter-housing-outlook-taking-shape-2026
The Financial System
The
toxic trifecta.
Tariffs
More detail on Trump’s tariff cuts.
China
China’s economy stumbles.
Investing
Volatility and
performance.
https://www.indexologyblog.com/2025/11/13/animal-spirits-or-anxiety/
Healthy bull or
bloated bubble?
Bubble
beliefs. (note the tendency for bubbles to burst when no one thinks that there
is a bubble. Certainly not what is occurring now)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5652371
Update on S&P’s Q3 earnings dashboard.
The latest form BofA.
https://www.zerohedge.com/markets/hartnett-best-trade-2026-shorting-hyperscaler-bonds
News on Stocks in Our Portfolios
What
I am reading today
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