The Morning Call
.
1/5/26
The
Market
Technical
The good news is that the S&P has managed
to stay above its 50 DMA and remains above all three DMAs and in uptrends
across all time frames. The bad news is that it couldn’t make a new high,
despite all the giddy talk about old Santa Claus (rally). So, it is being
squeezed between its all time high and the 50 as well as the 100 DMAs.
I remain of the opinion that this a Market to
be traded not invested in---and I am sticking to it until there is some follow
through (in either direction.
Key indicators to
watch.
https://talkmarkets.com/content/stocks--equities/new-year-same-risk?post=547999
Five
bullish signals.
https://www.zerohedge.com/the-market-ear/five-bullish-signals-start-week
Despite all the
happy talk about lower rates/inflation, bond investors don’t seem to be buying
it. The long bond is below all three DMAs and in downtrends across all timeframes.
I continue to believe that the only circumstance I can see pushing
rates meaningfully lower would be a recession.
Gold maintained its
upward momentum, making a new all-time high last week. It is above all three
DMAs and in uptrends across all timeframes. I continue to hold my trading
position in GDX.
https://www.zerohedge.com/the-market-ear/gold-setting-another-leg-seasonality-turns-sweet
Generally, global investors reflect their confidence a
country’s economy via what they are willing to pay for its currency. If that is
correct, then what does this chart tell you? Is it a reason for some caution? It
certainly gives me pause about buying stocks.
The
greenback’s problem.
https://www.zerohedge.com/the-market-ear/greenbacks-problem-what-happens-when-inflows-stop
Friday in the
charts.
https://www.zerohedge.com/markets/scrappy-new-year-bitcoin-bid-big-tech-pumpsndumps-start-2026
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
Week of 12/22
US stats were positive
though the primary were less so (one plus, one neutral, two minus, including an
inflation indicator). Overseas, the numbers were slightly negative but with one
positive price indicator. Nothing here to alter my forecast.
Week of 12/29
As you might
expect, last week was woefully short economic data. In the US, what there was,
was positive with no primary or inflation stats. Overseas, the numbers were
mixed, also with no inflation data.
Worth mentioning
is that the 2026 forecasts I have been reading point to a declining rate of
inflation---clearly counter to my forecast. Presently, the only clear sign of
such a course is the decline in the Owners’ Equivalent Rent calculation in the
CPI. But (1) we have known that was occurring for over a year; so that is not
really new news and (2) while it may be part of the official calculation of
inflation, it is, in my opinion, largely an economic abstraction that has
little to do with rising prices that are a part of the average American’s
budget.
https://www.calculatedriskblog.com/2026/01/inflation-adjusted-house-prices-27.html
So, while I must
be cognizant of this risk to my outlook, I am sticking with it until there is
clearer evidence that I am wrong. I keep the yellow light flashing.
US
International
Other
The end of globalization.
https://mrzepczynski.blogspot.com/2026/01/the-end-of-great-globalization.html
Fiscal
Policy
Increasing the taxes on the rich is not the
solution.
https://reason.com/2026/01/01/why-mitt-romneys-call-to-tax-the-rich-falls-apart/
Inflation
Inflation expectations align, justifying Fed
shift.
https://www.zerohedge.com/geopolitical/inflation-expectations-align-justifying-fed-shift
Affordability
Wages have grown faster than prices.
https://www.apolloacademy.com/wages-have-grown-faster-than-consumer-prices/
2026
Goldman’s top investing themes for 2026.
https://www.zerohedge.com/markets/these-are-top-themes-goldman-tracking-2026
Goldman’s economic outlook.
Wall Street sees another banner year.
https://www.nytimes.com/2026/01/02/business/dealbook/wall-street-market-prediction.html
And for those who like to worry.
https://www.zerohedge.com/markets/10-very-important-trends-watch-we-enter-2026
Question #1 for 2026.
https://www.calculatedriskblog.com/2026/01/question-1-for-2026-how-much-will.html
Question #2 for 2026.
https://www.calculatedriskblog.com/2026/01/question-2-for-2026-how-much-will-job.html
What could go wrong?
https://www.zerohedge.com/markets/bearish-counterpoint-what-could-go-wrong-markets-2026
Investing
The Ponzi scheme in private equity.
https://www.zerohedge.com/markets/ft-exposes-literal-definition-ponzi-scheming-private-equity
News on Stocks in Our Portfolios
What
I am reading today
How the surprise
raid on Maduro went down.
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