4/8/24
The Market
Technical
The S&P had a wild ride last week---beginning
with a gap down open that was subsequently filled. But in the end its very
short term uptrend was negated. However, it remains above the upper boundary of
its short term uptrend and above all DMAs. Let’s watch the follow through but
my assumption remains for continued upward momentum. The only negative is that
large gap up open below that needs to be filled.
Something broke on Thursday.
https://www.zerohedge.com/markets/something-broke-markets-thursday
Momentum goes vertical.
https://www.ft.com/content/8a24676e-a8af-44d8-8785-ba1b05d3da02
The latest from Goldman.
https://www.zerohedge.com/markets/goldman-hedge-fund-honcho-warns-price-action-consistent-reflation-trade-vol-inducing-stocks
The latest from BofA.
https://www.zerohedge.com/markets/hartnett-explosion-gold-shows-investors-are-preparing-endgame
The risk of a disorderly unwind is growing.
https://www.zerohedge.com/markets/multimanager-funds-are-20x-leveraged-each-new-billion-risk-disorderly-unwind-only-grows
I continue to hold my IWN trading position.
The long bond had an even rougher week than stocks.
Tuesday saw a huge gap down open and the subsequent successful challenge of all
three DMAs. Coupled with the facts that (1) TLT has now made four lower highs
suggests and (2) it is in downtrends across all time frames suggests that the
bond boys are not buying lower rates (higher prices).
Where does rising bond yields start to hurt?
https://www.zerohedge.com/the-market-ear/rising-bond-yields-what-level-goldilocks-and-what-level-does-it-start-hurt
Hardly anyone is short Treasuries.
https://www.zerohedge.com/markets/hardly-anyone-short-treasuries-perhaps-they-should-be
GLD continued its Titan III formation. The pin
action suggests more to come. The main negative is those two gap up opens that
need to be filled. As you know, I am becoming increasingly concerned about (long
term) inflation.
I continue to hold my trading position in GDX---the
gold miners ETF.
Gold versus bitcoin.
https://www.zerohedge.com/markets/bitcoin-vs-gold-debate-continues
Gold bulls eye more record highs.
https://www.reuters.com/markets/commodities/gold-bulls-eye-more-record-highs-despite-lightning-gains-2024-04-05/
The dollar was down for the week but maintained its
very short term uptrend. In addition, it challenged its 100 DMA and then
bounced to the upside. It makes no sense to me for GLD and UUP to be
simultaneously as strong as they are. So your narrator is confused.
Friday in the charts.
https://www.zerohedge.com/markets/oil-gold-soar-week-good-data-wrecks-rate-cut-hopes-slamming-stocks-bonds
Fundamental
Headlines
The Economy
Week
in review
Last week’s stats were mixed though the primary
indicators were upbeat (two up, one down). That does nothing to bring clarity
to the overall direction of the economy---even though the headline narrative is
that it is gaining strength and there was lots of Fed speak reinforcing that
notion. I recognize that puts me on the radical fringe; but I have never had
problem with a contrarian viewpoint.
https://www.zerohedge.com/markets/behind-todays-stellar-jobs-print-it-was-literally-all-part-time-jobs-and-illegals
The inflation data was relatively benign again,
fitting my ‘inflation in the rear view mirror forecast.’ However, as I have been indicating I am starting
to have second thoughts on that position. An unbelievably irresponsible fiscal
policy, a historically dovish Fed (its current hawkish noises, notwithstanding)
and the recent performance of commodities (gold, oil) and bitcoin have me thinking
that inflation may be as good (low) as it is going to get. I am not altering my
call, but I am close to doing so.
Bottom line:
(1)
the overall economic outlook remains unclear,
(2)
I am not altering my inflation forecast [i.e., inflation
in the rear view mirror] ---although I am beginning to contemplate it.
My primary concern
remains that an easing in monetary policy will only amplify the impact of a
grossly irresponsible fiscal policy which if left unresolved will ultimately
push interest rates and inflation to even higher levels, risking a tighter
monetary policy and impeding the economy’s ability to grow.
As an example:
https://www.zerohedge.com/political/house-freedom-caucus-members-earmarked-nearly-1-billion-taxpayers
How about another one?
https://www.zerohedge.com/political/he-blackmailed-mtg-questions-speaker-johnsons-complete-departure-over-abortion-illegals
(3) the question of
recession [what kind of landing] remains a bit murky, especially with the constant
downward revisions in the data. As you know, my forecast had been for some type
of growth problem which I have considered changing---likely back to the ‘muddle
through’ scenario.
The latest nowcast.
https://www.capitalspectator.com/us-q1-gdp-nowcast-highlights-growth-slowdown-persisting/
From my favorite
optimist.
https://scottgrannis.blogspot.com/2024/04/moderate-growth-and-disinflation-still.html
US
International
The February German trade balance was +E21.4
billion versus consensus of +E25.5 billion; February industrial production was
up 2.1% versus +0.3%.
Other
Inflation
Rising
oil prices reignite inflation fears.
https://www.nytimes.com/2024/04/05/business/dealbook/oil-prices-inflation.html
Bottom line.
The 2024 S&P earnings outlook.
https://www.ft.com/content/fe384e83-8a39-4d24-b47e-d5ae180a7883
Investing lessons from your mother.
Investing Lessons From Your Mother - RIA
(realinvestmentadvice.com)
News on Stocks in Our Portfolios
What I am reading today
The hubris of our ‘expert class.’
https://www.realclearmarkets.com/articles/2024/04/05/oh_the_hubris_of_our_expert_class_it_really_needs_a_whuppin_1022907.html
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