The Morning Call
.
12/22/25
The economy seems fine, ditto the
Market. Much of the world will be hardly working or not working at all. So I am taking the next two weeks off. I wish
you a Happy Holiday.
The
Market
Technical
The S&P closed fractionally higher on the
week. It remained below the lower boundary of the former uptrend off its May
low (~6998) and its former high (~6920). On the other hand, (1) it bounced off
its 50 DMA (2) the seasonal factors are still at work, and (3) that the index
is above all three DMAs and in uptrends across all time frames.
Still, 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.
Despite being up
slightly up on the week, TLT’s chart still looks dismal. It reset its 200 DMA
to resistance and is now below all DMAs as well as being in downtrends across
all timeframes. Clearly, bond investors are not impressed with the stock boys positive
outlook for inflation and further rate cuts. I have repeatedly observed in this
note that I believe the bond market is a much better predictor of future economic
activity than the stock market---and I am sticking with it. I continue to
believe that the only circumstance I can see pushing
rates meaningfully lower would be a recession.
Gold maintained its
upward momentum---another reason I remain cautious on the stock market. It is
above all three DMAs and in uptrends across all timeframes. I continue to hold
my trading position in GDX.
The dollar had a good week; but like TLT its overall technical
performance is not good. About the only positive thing to say about UUP is that
it remains within its short term trading range and, optimistically, will
continue to do so. Although I don’t think more rate cuts are the answer for its
dismal performance.
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
Fundamental
Headlines
The
Economy
US stats last week
were negative (though they included a lot of catchup data from October and
November), with no primary and one positive inflation indicator. Overseas, the
numbers were negative with three negative inflation indicators.
So nothing here to
alter either my growth (muddle through) or inflation (as good as it is going to
get) forecasts. But my yellow light is still flashing.
With the Western world
preparing for Christmas, the only development worth mentioning is the BOJ
lifting in its bank rate. Its impact will affect the Market (negative) more
than the economy by precipitating the unwinding of the yen carry trade---a subject
I have covered multiple times over the past month. So I won’t waste anymore
words here.
US
International
Other
Fiscal
Policy
A break for small businesses.
Reversing immigrant welfare.
2026
A word of caution
about predictions. A major reason why predictions seldom work out is the
constant occurrence of exogenous events. To paraphrase Galbraith ‘when things
change, I change my opinion’. The Market does that ruthlessly.
https://www.indexologyblog.com/2025/12/18/cautioning-the-clairvoyant/
Investing
Six ways to
improve your investment performance.
https://awealthofcommonsense.com/2025/12/6-simple-ways-to-improve-your-investment-performance/
News on Stocks in Our Portfolios
Paychex press
release (PAYX): Q2 Non-GAAP EPS of $1.26 beats by $0.03.
Revenue of $1.56B
(+18.2% Y/Y) beats by $10M.
What
I am reading today
Trump’s
most brazen lies. The author is clearly no fan of Trump, so I take his own narrative
with a grain of salt. That said, as I listened to the Donald’s speech, I was
struck with how outlandish some of his statements were. I kept thinking, this
speech has the tone of desperation.
Reversing
Alzheimer.
https://www.zerohedge.com/medical/reversing-alzheimers-forgotten-causes-and-cures-big-pharma-buried
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for Survival’s website (http://investingforsurvival.com/home)
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