The Morning Call--One step closer to nowhere

The Morning Call

11/17/17

The Market

         

    Technical

Yesterday, the indices (DJIA 23458, S&P 2585) seemingly put their poor pin action of the last week in the rear view mirror.  Some follow through will cement that call.  Volume was flat and breadth improved.  The bottom line is that both of the Averages remain above their 100 and 200 day moving averages and are in uptrends across all time frames---and with the assumption is that stock prices are going higher.

http://www.zerohedge.com/news/2017-11-16/options-traders-furiously-bftd

The VIX (11.7) was down 1%, but still finished above the upper boundary of its former short term downtrend (now a trading range), above its 100 day moving average (now support), above its 200 day moving average (now support) and above the lower boundary of its long term trading range.  I was a little surprised that the VIX wasn’t down more and that fits with my observation yesterday that volatility may just be returning to normal after an unusually placid period.  Still follow through.

            https://www.marketwatch.com/story/beneath-a-calm-surface-the-stock-market-is-undergoing-a-major-change-2017-11-15

The long Treasury was down but remained above its 100 day moving average for a second day (now resistance; if it remains there through the close today, it will revert back to support), above its 200 day moving average (now support) and above the lower boundaries of its short term trading range and long term uptrend.  

            http://scottgrannis.blogspot.com/2017/11/the-yield-curve-is-not-red-flag.html

The dollar rose, ending below its 200 day moving average (now resistance), below the upper boundary of its short term downtrend, but above its 100 day moving average (now support).  It appears that UUP is confirming its downtrend---which suggests economic weakness or flight from the dollar.

GLD was down, closing below its 100 day moving average for a second day (however, since GLD has violated this moving average five times in the last week, it is not clear at this point whether it is serving as resistance or support), above its 200 day moving average (support) and the lower boundary of a short term uptrend. 

Bottom line: long term, the indices remain strong viz a viz their moving averages and uptrends across all timeframes. Short term, they are above the resistance level marked by their August highs, meaning that there is no resistance between current price levels and the upper boundaries of the Averages long term uptrends. The technical assumption has to be that stocks are going higher.

           

Trading in UUP, GLD and TLT remain out of sync with themselves, the VIX and stocks, and seem to be pointing at a change in trends---but in different directions.  I am watching for more follow through in all.

I remain uncomfortable with the overall technical picture.

           

           

    Fundamental

       Headlines

            The economic data releases yesterday were weighed to the plus side: the November Philly Fed index and weekly jobless claims were disappointing but October industrial production, the November housing index and October import/export prices were ahead of estimates.  Nothing overseas.

            ***overnight, in a speech Draghi before the European Banking Congress confirmed what the numbers have been telling us, i.e. that the EU economy is improving. (medium):

            http://www.zerohedge.com/news/2017-11-17/draghi-speech-everything-awesome-europe-and-no-signs-systemic-risks

            And now this from the morons at the Fed (medium):

            http://www.zerohedge.com/news/2017-11-16/fed-hints-during-next-recession-it-will-roll-out-income-targeting-nirp

            The big news of the day was the house’s passage of its version of tax reform.  Clearly, that is a step toward achieving a tax bill.  Plus the senate is scheduled to pass its version today.  Then the tough reconciliation process begins.  However, this is a step forward.  On the other hand, the more important issue is just how positive the final product, assuming that there is one, will be for individual taxpayers, corporate investment and economic growth.

            Here is what is in the house tax reform bill (medium):

            https://www.washingtonpost.com/news/wonk/wp/2017/11/16/the-house-is-voting-on-its-tax-bill-thursday-heres-what-is-in-it/?curator=thereformedbroker&utm_source=thereformedbroker&utm_term=.5aa0b504786d

            This is the best that the Weekly Standard can do in praising the current tax reform (medium):

            http://www.weeklystandard.com/editorial-the-tax-bills-are-worth-it/article/2010480

            Not much evidence that a corporate tax cut will boost wages (medium):

            http://www.realclearmarkets.com/articles/2017/11/16/not_much_evidence_that_a_corporate_tax_cut_boosts_wages_102989.html

            Bottom line: tax reform, if passed in its current form, is not a negative.  Indeed, it may be a mild positive.  However, it is not simpler, fairer or pro-growth and hence is not going to achieve the stated objectives of the GOP.  It will allow republicans to claim that they delivered on a campaign promise.  That might help them in the 2018 elections but when taxpayers realize that they have been duped, it could work against them.

Expected 2017 corporate profits (short):

            http://politicalcalculations.blogspot.com/2017/11/fall-2017-snapshot-of-expected-future-s.html#.Wg2xYNCnE2w

       Investing for Survival

   

            Ten financial principles.

            http://www.humbledollar.com/2017/11/ten-financial-principles/

    News on Stocks in Our Portfolios

 

            Brown-Forman (NYSE:BF.B) declares $0.1975/share quarterly dividend, 8.2% increase from prior dividend of $0.1825.

Tiffany (NYSE:TIF) declares $0.50/share quarterly dividend, in line with previous.

            Kimberly-Clark (NYSE:KMB) declares $0.97/share quarterly dividend, in line with previous.

            Home Depot (NYSE:HD) declares $0.89/share quarterly dividend, in line with previous.

            BlackRock (NYSE:BLK) declares $2.50/share quarterly dividend, in line with previous.

            Nike (NYSE:NKE) declares $0.20/share quarterly dividend, 11.1% increase from prior dividend of $0.18.

Economics

   This Week’s Data

            The November Philadelphia Fed manufacturing index was reported at 22.7 versus expectations of 25.0.

            https://www.advisorperspectives.com/dshort/updates/2017/11/16/philly-fed-manufacturing-index-continued-expansion-in-november

            October industrial production rose 0.9% versus estimates of up 0.4%; capacity utilization came in at 77.0 versus forecasts of 76.3.

            The November housing index was reported at 70.0 versus consensus of 67.0.

            https://www.advisorperspectives.com/dshort/updates/2017/11/16/nahb-housing-market-index-builder-confidence-climbs-to-8-month-high-in-november

                        October housing starts increased 13.6% versus projections of a 5.5% advance.

   Other

            Update on big four economic indicators (medium):

            https://www.advisorperspectives.com/dshort/updates/2017/11/16/the-big-four-economic-indicators-industrial-production-up-0-9-in-october

Politics

  Domestic

  International War Against Radical Islam

            Latest from Saudi Arabia.  It’s the money stupid. 

            http://www.zerohedge.com/news/2017-11-16/riyadh-allowing-imprisoned-princes-buy-their-freedom

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

The Morning Call--A seminal moment

The Morning Call

11/16/17

The Market

         

    Technical

The indices (DJIA 23271, S&P 2564) started the day as it has the last four days---down big; the difference yesterday was that they couldn’t fight their way back to the (near) flat line.  Tuesday, they were able to get close to neutral, yesterday, no recovery.    Meanwhile, volume was down and breadth remained weak.  Of course, this is the first teeny, weeny bit of cognitive dissonance investors have faced since early September.  So it hardly gives reason to be doubting that stocks are going higher.  We may be seeing the reintroduction of normality in the pin action; and even ‘may be’ isn’t for sure.    The bottom line is that both of the Averages remain above their 100 and 200 day moving averages and are in uptrends across all time frames---and with the assumption is that stock prices are going higher.

The VIX (13.3) was 13%, finishing above the upper boundary of its short term downtrend for the third day, resetting to a trading range, above its 100 day moving average (now support), above its 200 day moving average for the fourth day, reverting to support and above the lower boundary of its long term trading range.  As I suggested above, volatility may just be returning to normal after an unusually placid period.  At the moment, I think that is the most one can say.  Still its divergent behavior over the last four trading days keeps a warning light flashing.

           

The long Treasury was 1%; this time indicating that last Friday’s plunge may have been some one-off occurrence.  It closed back above its 100 day moving average, one day after reverting to resistance (if it remains there through the close on Friday, it will revert back to support), above its 200 day moving average (now support) and above the lower boundaries of its short term trading range and long term uptrend.   Like Tuesday, other segments of the long bond market were down.  And like the VIX, it seems like something could be going on beneath the surface. 

           

The dollar was down again, ending below its 200 day moving average (now resistance), below the upper boundary of its short term downtrend, below the lower boundary of its very short term uptrend, voiding it, but above its 100 day moving average (now support).  It appears that UUP is confirming its downtrend---which suggests economic weakness or flight from the dollar.

GLD was down, closing back below its 100 day moving average (the fifth violation of this moving average in the last week), above its 200 day moving average (support) and the lower boundary of a short term uptrend. 

Bottom line: long term, the indices remain strong viz a viz their moving averages and uptrends across all timeframes. Short term, they are above the resistance level marked by their August highs, meaning that there is no resistance between current price levels and the upper boundaries of the Averages long term uptrends. The technical assumption has to be that stocks are going higher.

           

Trading in UUP, GLD and TLT remain out of sync with themselves, the VIX and stocks, and seem to be pointing at a change in trends---but in different directions.  I am watching for more follow through in all.

I remain uncomfortable with the overall technical picture.

           

    Fundamental

       Headlines

            Yesterday’s economic stats were mixed to positive: weekly mortgage and purchase applications were up, September business inventories were unchanged but sales were strong, October retail sales were above estimates but ex autos, they were below, October CPI and CPI ex food and energy were both in line and the November NY Fed manufacturing index was disappointing.

Overseas, third quarter Japanese GDP was above estimates; October UK unemployment hit a 42 month low; the Chinese fixed income markets are in turmoil.

http://www.zerohedge.com/news/2017-11-15/complete-idiots-guide-biggest-risks-china

And:

http://www.businessinsider.com/china-will-bring-volatility-to-markets-2017-11

A quick look at our ruling class:

(1)   the much Trump-touted Trump major news announcement was anything but; it mostly consisted of self-praise,

(2)   the GOP congress continues to prove it is incapable of following its own stated agenda.  The latest being a key desertion in the senate on the tax reform bill,

                  http://www.zerohedge.com/news/2017-11-15/senator-ron-johnson-becomes-first-republican-opposed-tax-bill

(3)   and perhaps the seminal moment in the tax reform debate, Gary Cohn gets his a ha moment (medium and a must read):

     http://www.zerohedge.com/news/2017-11-15/moment-gary-cohn-realized-his-entire-economic-policy-disaster

            Bottom line: fiscal policy is a mess and the current versions of tax reform won’t change that.  Monetary policy is a mess and with group in charge now, that isn’t going to change.  The good news is that economy is straining to increase growth, however paltry, in spite of the ruling class’ effort to thwart its effort.   The bad news is that the Market is discounting an economic scenario is that is a wet dream.  I would continue to sell stocks that have achieved their upside price objective---that is the sell high part.  The buy low part is investing in stocks of quality companies that have been cut in half or worse.

            Looking for inflation in all the wrong places (medium):

            http://www.zerohedge.com/news/2017-11-15/looking-inflation-all-wrong-places

       Investing for Survival

   

            A little knowledge can be dangerous.

            https://ofdollarsanddata.com/a-little-knowledge-is-dangerous-8b158566e094?curator=thereformedbroker

    News on Stocks in Our Portfolios

 

           

Economics

   This Week’s Data

            September business inventories were flat were expectations of a 0.1% increase; sales soared 1.4%.

            Weekly jobless claims rose 10,000 versus an anticipated decline of 3,000.

            October import prices were up 0.2% versus estimates of up 0.4%; export prices were flat versus consensus of +0.1%.

           

   Other

Politics

  Domestic

  International War Against Radical Islam

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The Morning Call--Am I missing something?

The Morning Call

11/15/17

The Market

         

    Technical

The indices (DJIA 23409, S&P 2578) started the day as it has the last three days---down big---then spent the rest of the day fighting back.  The only difference is that they couldn’t make back to neutral yesterday.  Still it was a valiant effort and that strong rebound needs to be taken into account.   So I don’t think yesterday’s pin action diminishes ‘the relentless drive higher’ theme.  Meanwhile, volume spiked again; though this could be related to Friday’s options expiration.  The real negative was a decided turn for the worse in breadth.  Still that is one day’s activity; so it is way too soon to be getting uneasy.  The bottom line is that both remain above their 100 and 200 day moving averages and are in uptrends across all time frames. 

The VIX (11.5) was up pennies, finishing above the upper boundary of its short term downtrend for the second day (if it remains there through the close today, it will reset to a trading range), above its 100 day moving average for a third day, reverting to support, above its 200 day moving average (now resistance; if it remains there through the close on today, it will revert to support) and above the lower boundary of its long term trading range.  Even if the VIX is able to reset its short term downtrend, it will remain in a trading range going back five years.  So it is way too soon to be reading too much in its recent pin action.  On the other hand, its divergence from its normal inverse relationship with stocks keeps the warning light flashing.

            http://libertystreeteconomics.newyorkfed.org/2017/11/the-low-volatility-puzzle-are-investors-complacent.html

The long Treasury experienced another day of recovery; though again not enough to suggest Friday was some one-off random occurrence.  It closed below its 100 day moving average for the third day, reverting to resistance but above its 200 day moving averages (now support) and above the lower boundaries of its short term trading range and long term uptrend.   Like the VIX, it seems like something could be going on beneath the surface.  That point was underlined by the battering taken by other segments in the long bond complex, especially the lower quality issues.   We need more follow through; but it looks like the TLT buying is a safety trade.

           

The dollar was hit hard, ending below its 200 day moving average (now resistance), below the upper boundary of its short term downtrend, below the lower boundary of its very short term uptrend but above its 100 day moving average (now support).  It appears that UUP is confirming its downtrend---which is not a safety trade.

GLD was up, closing back above its 100 day moving average (the fourth violation of this moving average in the last week), above its 200 day moving average (support) and the lower boundary of a short term uptrend. 

http://www.zerohedge.com/news/2017-11-14/gold-bounces-key-technical-support-massive-volume

Bottom line: long term, the indices remain strong viz a viz their moving averages and uptrends across all timeframes. Short term, they are above the resistance level marked by their August highs, meaning that there is no resistance between current price levels and the upper boundaries of the Averages long term uptrends. The technical assumption has to be that stocks are going higher.

           

Trading in UUP, GLD and TLT remain out of sync with themselves, the VIX and stocks, and seem to be pointing at a change in trends---but in different directions.  I am watching for more follow through in all.

I remain uncomfortable with the overall technical picture.

           

    Fundamental

       Headlines

            Yesterday’s US economic data was negative: the October small business confidence index and month to date retail chain store sales were disappointing.  PPI was much hotter than expected.  I consider this a negative because I don’t like inflation in any form. However, the dreamweavers may view this as a plus as it suggests a surging economy.

            Overseas, Europe continues to shine---third quarter German GDP was strong and third quarter UK inflation was below forecasts; and China remains iffy---October Chinese industrial production and fixed asset investments were below consensus while retail sales were above.

           

            ***overnight, third quarter Japanese GDP was above estimates; October UK unemployment hit a 42 month low; the Chinese 10 year bond traded at a new high yield (this is potentially very important):

            http://www.zerohedge.com/news/2017-11-14/china-10y-bond-yield-breaks-above-4-mental-line-defense

            A deeper look into the Chinese economy (medium):

            http://www.zerohedge.com/news/2017-11-14/socgen-chinas-slowdown-making

            The tax reform sausage making continues a pace, though the provisions of both the house and senate versions change hourly. So trying to do analysis is a losing proposition.

            This is a decent argument why the tax bill won’t increase the deficit all that much.  Notice (1) it is a relative argument---it will increase the debt, just not all that much, (2) it fails to address the issues of whether it is simpler or fairer and (3) saying that the debt is growing primarily because of entitlements, is not an excuse for growing it by any other means.

            https://www.investors.com/politics/editorials/gop-tax-cuts-federal-deficits/

            The good news of the day was that Mohamed El Erian is being considered for the Fed vice chair.  I have linked to many articles by El Erian which have shown him to be a practical economist.  He would be a great addition to Fed and would likely be a force for moving the monetary normalization process along without a lot of the wimpy hand wringing that has characterized the current crew.  That said, El Erian believes that the economy faces huge headwinds and is going to grow slowly, tax reform or not---which is exactly opposite of Trump’s view point.  So the odds of his nomination seem low.

            http://www.zerohedge.com/news/2017-11-14/white-house-considering-mohamed-el-erian-fed-vice-chair-report

                Bottom line: the most important thing maybe what is occurring on the technical side.  I wish I could provide an astute analysis about the meaning of the aforementioned divergences.  But I can’t except to say something seems to be going on beneath what seems a placid Market surface and I have no idea what it is.

                I wanted to address an issue that might be causing confusion among readers, to wit, how can I be buying stocks when I am so negative on the Market?  And it is a valid point.  First, remember that the Valuation Model for each stock is different from that of the broad market in that it only looks at factors relative to the stock and underlying company. 
So it is perfectly reasonable to have the stock of a company in its Buy Range when the Market is in a Sell Range. 

Second, back in early 2016, investors took industrial stocks out behind the wood shed and shot them.  Many traded into their Buy Ranges.  However at the time, I was so concerned about Market Valuation that I chose to ignore those valuations on the thesis that once the Market rolled over, the stocks would be even cheaper.  Well, I was wrong.  Since then that same pattern has occurred with the stocks of several industries and many individual companies---oil and retail come immediately to mind.  Many stocks in these industries haven’t just been cut in half but they have traded to valuation levels similar to those of 2009.

Which raises the question, is the bear market I have been anticipating going to be a rolling one where each industry/stock gets its time before the firing squad versus a flush of everything at once?   I clearly don’t know the answer to that but when stocks the likes of WW Grainger, Gilead Sciences, Willams-Sonoma endure their own private bear market, I am going to hedge my bets by stepping in irrespective of the lofty levels of the indices.  I may be wrong.  We could have a general wringing out in prices, but the downside to these purchases is considerably less than those trading at or near their highs.

            My thought for the day: the Simmelweis Reflex describes our tendency to scrutinize ideas more critically when we disagree with then than when we agree and to recall supporting data rather than opposing evidence.  This helps explain why it can be so hard to find, admit and respond to our mistakes---why we hang on to bad trades so and even refuse to see them as bad.

       Investing for Survival

   

            Your politics are hurting your investments,

            https://www.pragcap.com/your-politics-are-hurting-your-investments/

    News on Stocks in Our Portfolios

 

3M (NYSE:MMM) declares $1.175/share quarterly dividend, in line with previous.          

Economics

   This Week’s Data

            Month to date retail chain store sales grew at a slower pace than in the prior week.

            Weekly mortgage applications rose 3.1% while purchase applications were up 0.4%.

            October CPI was up 0.1%, in line; ex autos, it was up 0.2%, also in line.

            October retail sales advanced 0.2% versus estimates on +0.1%; ex autos, they were up 0.1% versus forecasts of +0.2%.

            The November NY Fed manufacturing index came in at 19.4 versus expectations of 26.0.

           

   Other

            In praise of Trump’s deregulation effort (medium):

            http://www.realclearmarkets.com/articles/2017/11/14/president_trumps_deregulation_signals_addition_by_subtraction_102986.html

Speaking of which, moving ahead with health care reform (medium):

https://www.nytimes.com/2017/11/12/health/doctor-pay-trump.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0

            A review of third quarter corporate sales and earnings; plus a look at valuations (medium):

            https://www.advisorperspectives.com/commentaries/2017/11/14/solid-sales-growth-and-margins-at-new-highs-drive-3q17-results

            The latest household debt and credit report from the NY Fed (medium):

            http://www.zerohedge.com/news/2017-11-14/fed-issues-subprime-warning-household-debt-hits-new-all-time-high

            A closer look at auto loans (short):

            http://www.zerohedge.com/news/2017-11-14/one-chart-proves-auto-saar-numbers-are-nothing-more-rigged-debt-fueled-farce

Politics

  Domestic

  International War Against Radical Islam

            An inside look at the Saudi ‘purge’ (this reads like it was government sponsored):

            http://www.arabiafoundation.org/arabia-comment/why-the-saudi-purge-is-not-what-it-seems-to-be/

Miscellaneous

            Dinosaur era shark found off the coast of Portugal (short but interesting):

            http://www.newsweek.com/dinosaur-era-frilled-shark-insane-teeth-found-portugal-708764

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

The Morning Call--GOP continues to work on increasing the deficit which it growing all by itself

The Morning Call

11/14/17

The Market

         

    Technical

The indices (DJIA 23439, S&P 2584) fought off early weakness to finish up on the day (the relentless drive higher).  Volume soared, though breadth was mixed.  Both remain above their 100 and 200 day moving averages and are in uptrends across all time frames. 

http://www.athrasher.com/week-review-volatility-momentum-breadth-sectors-sentiment-bonds-consumer-spending-111317/?curator=thereformedbroker&utm_source=thereformedbroker

The VIX (11.5) continued to advance, turning in a modest follow through from last Thursday/Friday’s pin action.  Not spectacular, but still notable for being up on an up Market day.  It finished above the upper boundary of its short term downtrend (if it remains there through the close on Wednesday, it will reset to a trading range), above its 100 day moving average (now resistance; if it remains there through the close on today, it will revert to support), above its 200 day moving average (now resistance; if it remains there through the close on Wednesday, it will revert to support) and above the lower boundary of its long term trading range.  As I noted in the Closing Bell, in a three day span, the VIX has gone from threatening a challenge of its long term trading range and making a new all-time low to challenging both moving averages and the upper boundary of its short term downtrend.    I am not sure what the VIX divergence from the equity pin action means.  But I take it as a caution signal.  More follow through.   The July low (8.8) remains the bottom.

The long Treasury recovered modestly from its shellacking on Friday; though certainly not sufficiently to suggest Friday was some one-off random occurrence.  Technically, it closed at roughly the same status as on Friday---below its 100 day moving average (now support; if it remains there through the close today, it will revert to resistance) but above its 200 day moving averages (now support) and above the lower boundaries of its short term trading range and long term uptrend.   Like the VIX, it seems like something could be going on beneath the surface.  We just need more follow through.

            https://www.bloomberg.com/news/articles/2017-11-13/the-u-s-yield-curve-is-flattening-and-here-s-why-it-matters

            The chase for yield (medium):

            http://www.zerohedge.com/news/2017-11-13/emerging-market-junk-debt-issuance-surges-new-record-search-yield-intensifies

The dollar rose fractionally, ending below its 200 day moving average (now resistance), below the upper boundary of its short term downtrend, but above its 100 day moving average (now support) and continues to develop a very short term uptrend.  (Still caught in the narrowing gap between the upper boundary of its short term downtrend and the lower boundary of its very short term uptrend).

GLD was up, closing back below its 100 day moving average, but above its 200 day moving average (support) and the lower boundary of a short term uptrend. 

http://www.zerohedge.com/news/2017-11-13/ray-dalio-goes-gold-buying-spree-adds-575-gld-holdings-becomes-8th-largest-holder

 Bottom line: long term, the indices remain strong viz a viz their moving averages and uptrends across all timeframes. Short term, they are above the resistance level marked by their August highs, meaning that there is no resistance between current price levels and the upper boundaries of the Averages long term uptrends. The technical assumption has to be that stocks are going higher.

           

Trading in UUP, GLD and TLT remain out of sync with themselves, the VIX and stocks, and seem to be pointing at a change in trends---but in different directions.  I am watching for more follow through in the TLT and VIX

I remain uncomfortable with the overall technical picture.

           

    Fundamental

       Headlines

            One datapoint released yesterday: the October budget deficit was larger than anticipated (what else is new).  Nothing overseas.

            ***overnight, German third quarter GDP was up 3.3% versus a 2.6% increase in the second quarter; third quarter UK inflation was below forecasts; October Chinese industrial production and fixed asset investments were below consensus while retail sales were above.

            http://www.zerohedge.com/news/2017-11-14/german-gdp-growth-smashes-expectations-q3-2017

            Both the house and senate started marking up their tax reform legislation; the GOP goal being to have a bill passed by December.  Since this will be a very fluid process, any one day’s news will likely not be that significant in itself---not that there was anything meaningful done yesterday.   The up to date status:

            http://www.zerohedge.com/news/2017-11-14/senate-begins-marking-tax-reform-plan-post-thanksgiving-vote-looms

            Bottom line: I don’t want to make too big a deal about a single datapoint, but the budget deficit is illustrative of the issue I have been pounding for years---fiscal policy is a disgrace; by sapping resources to service an increasing level of debt, it is inhibiting economic growth and that is a mild understatement if long rates start back towards the unheard, never before seen level of 5%.  Meanwhile, investors are getting jiggy about adding another $1.5 trillion to that debt while getting nothing simpler or fairer in return.

            For the bulls (medium):

            https://www.joefahmy.com/2017/11/07/the-perfect-storm

       Subscriber Alert

            Retail stocks continue to get abused in an otherwise euphoric market.  Many have been cut in half price wise.  At the open this morning, the Aggressive Growth Portfolio will Buy a position in  Tractor Supply (TSCO-$61) and the Dividend Growth and High Yield Portfolios will Buy a position in Williams-Sonoma (WSM-$51).

       Investing for Survival

   

            How fortunes are made in the stock market.

            https://www.safalniveshak.com/how-fortunes-are-made-in-stock-market/

           

    News on Stocks in Our Portfolios

 

Home Depot (NYSE:HD): Q3 EPS of $1.84 beats by $0.02.

Revenue of $25B (+8.0% Y/Y) beats by $450M.

Economics

   This Week’s Data

            The October budget deficit was $63.2 billion versus estimates of $58.0 billion.

            The October small business confidence index was reported at 103.8 versus expectations of 105.0.

            https://www.advisorperspectives.com/dshort/updates/2017/11/14/nfib-small-business-survey-index-inches-up-in-october

            October PPI rose 0.4% versus consensus of up 0.1%; ex food and energy, it was up 0.4% versus forecasts of up 0.2%

   Other

            US heavy truck sales up year over year (short):

            http://www.calculatedriskblog.com/2017/11/us-heavy-truck-sales-up-year-over-year.html

                Japanese government pension plan now at limit for stock position (medium):

            https://www.themacrotourist.com/posts/2017/11/13/gpif/

           

The latest from UBS (medium):

            http://www.zerohedge.com/news/2017-11-13/ubs-makes-striking-discovery-ex-energy-us-gdp-growth-slowest-2010

            The declining savings rate (medium):

            http://www.zerohedge.com/news/2017-11-13/disconcerting-message-behind-plummeting-savings-rate

Politics

  Domestic

  International War Against Radical Islam

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

Monday Morning Chartology

The Morning Call

11/13/17

The Market

         

    Technical

            Despite Friday’s moonshot in the VIX and the plunge in the long Treasury, the S&P merely drifted lower on higher volume.  There is nothing in the current performance in equities that points at any disruption in the relentless move higher. 

            The long Treasury got hammered on volume on Friday, reversing much of the positive technical work TLT accomplished over the past week.  It voided a newly developing very short term uptrend, closed below its 100 day moving average (now support; if it remains there through the close on Tuesday, it will revert to resistance), though it still finished above its 200 day moving average and the lower boundaries of its short term trading range and long term uptrend.   So in a day, TLT went from one trend change to its opposite.  What has changed bond investors’ minds?

            The dollar had a calm day on Friday, trading down pennies and remaining caught between the its 100 day moving average and the upper boundary of its short term downtrend (resistance) and its 200 day moving average and the lower boundary of its very short term uptrend (support).  I was a little surprised that TLT’s pin action didn’t have a bigger effect on UUP.

            Friday was a bit rough on GLD, though it wasn’t dinged as hard as TLT.  It reversed itself around its 100 day moving average for the third time in the week, though it remains above its 200 day moving average and the lower boundary of its short term uptrend.  It continues to struggle in a narrow price range, suggesting investor uncertainty/confusion.

            The VIX surged over 20% on Thursday and Friday on a less than 200 point (0.1%) decline in the Dow.  Of course, volatility is the VIX; but that kind of divergence suggests real nervousness in ‘short volatility’ pit.  As you can see, it closed above its 100 day moving average (now resistance; if it remains there through the close on Tuesday, it will revert to support), above its 200 day moving average (now resistance; if it remains there through the close on Wednesday, it will revert to support) and above the lower boundary of its long term trading range.  The July bottom held.

            As I noted in the Closing Bell, the pin action in the VIX and TLT could be just noise.  But clearly, it warrants attention.  We will know more by week’s end.

    Fundamental

       Headlines

       Investing for Survival

   

            Why we dig in and shouldn’t.

            http://thereformedbroker.com/2017/11/09/why-we-dig-in-2/

           

    News on Stocks in Our Portfolios

 

           

Economics

   This Week’s Data

   Other

            The Chinese Beige Book (medium):

            http://www.zerohedge.com/news/2017-11-12/warnings-china-beige-book

Politics

  Domestic

  International War Against Radical Islam

            The latest from Saudi Arabia (short):

            http://www.zerohedge.com/news/2017-11-12/arab-league-hold-urgent-meeting-iran-saudis-mobilize-f-15-fighter-jets

Visit Investing for Survival’s website (http://investingforsurvival.com/home) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.