Monday, May 5, 2014

Monday Morning Chartology

The Morning Call

5/514

The Market
           
    Technical

     Monday Morning Chartology

            The S&P has had a couple of good weeks, so the pause of the last couple of trading days is no surprise.  Still, it has not negated the developing head and shoulders nor has it made it to its prior high.  I continue to believe that the S&P will challenge the upper boundary of its long term uptrend but it will be a labored effort.



            The long Treasury (112.7) continues to be a stellar performer.  It is in a short term uptrend, above its 50 day moving average and is ever closer to the upper boundary (113.7) of that intermediate term downtrend.  As you know, I am a bit puzzled on what is driving bond prices higher.  On Friday, we got a blowout nonfarm payrolls number (yes, the participation rate remains bothersome) suggesting (1) a stronger economy and (2) an increased likelihood of the Fed accelerating the transition to tighter money.  In other words, the perfect scenario for higher interest rates (lower bond prices).  And, yet.



            GLD is not an inspiring chart.  It remains in short and intermediate downtrends, below its 50 day moving average and plenty of room to the downside before hitting the lower boundary of its long term trading range (blue line).



            Borrrrrrrrrrrrrring!  VIX continues to be of no help on Market direction.



            More on ‘sell in May’ (medium):

            More on midterm year seasonal patterns (short):

            Update on ‘the best stock market indicator ever’ (medium):

    Fundamental
    
            The risk trilogy (medium and today’s must read):

     News on Stocks in Our Portfolios
·         Occidental Petroleum Corporation (OXY): Q1 EPS of $1.75 beats by $0.05.
·         Revenue of $6.08B (+3.6% Y/Y) misses by $130M.

    • Chevron (CVX): Q1 EPS of $2.36 misses by $0.11.
    • Revenue of $53.26B (-6.3% Y/Y) misses by $1.21B.




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