The Morning Call
The Market
Technical
The
indices (DJIA 15275, S&P 1658) were a bit more volatile yesterday than they
have been recently but still closed within all major uptrends: short term
(14401-15112, 1580-1654 [both are now above their upper boundaries]),
intermediate term (13922-18922, 1476-2064) and long term (4783-17500,
688-1750).
Volume
declined, breadth deteriorated. The VIX
was once again up on an up price day; so I repeat the observation that the VIX
may be at a bottom and, hence, a good candidate for hedging (for traders).
GLD
(134.83) had another big down day. It
finished below the lower boundary of its intermediate term downtrend and is
approaching its prior low (130.23) and the lower boundary of its long term
uptrend (128.67). I am watching those
support levels for a bounce. If that
occurs, our Portfolios will likely start to re-build this position.
Bottom line: I
continue to believe that the upper boundaries of the Averages long term
uptrends will likely prove an insurmountable barrier. In the meantime, there is no other resistance
around to stop the current moon shot.
Nevertheless, the risk/reward equation at this point offers only the
nimblest of traders much opportunity.
Meanwhile, (m)y strategy continues to be to take
advantage of what I consider unwarranted optimism by lightening up on positions
when the stock price trades into its Sell Half Range
Fundamental
Almost
all the US
economic data yesterday was sub par: weekly mortgage and purchase applications
were both down, April industrial production was very disappointing and the May
NY Fed manufacturing index was well below estimates. However, April PPI was down as anticipated
while PPI ex food and energy rose slightly less than forecast. Clearly, these numbers stop the seven day
trend of improving stats. That said, it
still leaves the data mixed for the last two to three weeks. So our forecast remains unchanged but with
the amber light flashing.
Bur
no one cared because a decent percent of the media air time yesterday was taken
by AG Holder’s congressional testimony on IRS -gate
and it got a little testy at times.
So
in the face of lousy economic numbers and increasing government dysfunction
there was only one thing for stocks to do---go up.
Bottom
line: yesterday was a bit disappointing
as measured by US and EU economic data. Watching
the ruling class argue amongst itself is tiring but there is a bright
side---gridlock means that they can’t do more damage to us.
But the 800
pound gorilla in the room right now is global monetary policy. In the end,
nobody really knows how this story is going to end because the magnitude of the
current money printing regime is so completely unprecedented. My only point is that is dangerous to make
too heavy a bet that all will end well,
Tepper’s
Appaloosa Fund’s latest 13F (short):
Uncharted waters
(short):
Reversion to the
mean---for the bulls (short):
Investing for Survival
Offshore
tax havens (short):
http://www.zerohedge.com/news/2013-05-15/these-offshore-tax-havens-may-be-hazardous-your-deposit-confiscation-health
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