Tuesday, May 26, 2015

Tuesday Morning Chartology

The Morning Call

5/26/15

The Market
           
    Technical

       Tuesday Morning Chartology

            The S&P is in uptrends across all timeframes even the very short term and remains well above its 100 day moving average.  The only negative from a technical standpoint is that it has not shown much follow through after trading above its former all-time high.  It is only 12 points from the upper boundary of its long term uptrend which, it seems to me, it will inevitably challenge.  However, I continue to believe that challenge will not be successful in any meaningful way.



            A minor rally last week notwithstanding, the momentum remains to the downside in TLT, apparently the result of the bond guys seeing a rate hike sooner than the stock guys.



            GLD retreated last week back below its 100 day moving average and the neckline of the head and shoulders pattern.  The best thing we can say is that it isn’t going down, at least, on a short term and intermediate term basis.



            The VIX closed the week below its 100 day moving average and below the upper boundary of its very short term downtrend.  It is drawing neared to the lower boundaries of its short and long term trading ranges, suggesting its value as portfolio insurance continues to rise.
           


    Fundamental
   
      The latest from Greece (short):

       Anti-austerity parties win in Spanish elections (medium):

       Investing for Survival

            12 things I learned from Morgan Housel: Part 11

11. “Daniel Kahneman’s book Thinking Fast and Slow begins, ‘The premise of this book is that it is easier to recognize other people’s mistakes than your own.’ This should be every market commentator’s motto.”
It is an unfortunately aspect of human nature that we do not have perspective on ourselves. Humans have developed a series of heuristics that make it hard for us, especially in a modern world, to see our own mistakes. If you have an interest in exploring this topic, Daniel Kahneman explains why this is true in this excerpt from his book:
“I’m better at detecting other people’s mistakes than my own…. When you are making important decisions and you want to get it right, you should get the help of your friends. And you should get the help of a friend who doesn’t take you too seriously, since they’re not too impressed by your biases.”
Having a posse of people around you who are afraid to tell you that the emperor has no clothes is not helpful in overcoming this bias.  Morgan Housel cites Charlie Munger’s wisdom on this problem: “Only in fairy tales are emperors told they’re naked. Pavlovian association and other heuristics Morgan has written about acting together in the form of a lollapalooza make things worse.
  

      News on Stocks in Our Portfolios
 
Economics

   This Week’s Data

            April durable goods fell 0.5% versus expectations of down 0.6%; ex transportation, they rose 0.5% versus estimates of +0.4%.

   Other

            How the Fed depressed the recovery (short):

Politics

  Domestic

  International

            In case you weren’t aware (medium):
           

            Propaganda but something to think about (medium):







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