Tuesday, December 5, 2017

The Morning Call

The Morning Call


My diagnosis has gone from viral infection to pneumonia.  I am confined to bed.  Back when I can

The Market

            The indices (DJIA 24290, S&P 2639) had another schizophrenic day, opening up big in initial trading but giving much of that gain for the remainder of the day including a negative close for the S&P.  Volume was up; breadth mixed.  The bottom line remains that both of the Averages continue to trade above their 100 and 200 day moving averages and are in uptrends across all time frames---with the assumption being that stock prices are going higher.
The VIX (11.7) was up another 2 ¾%, closing above the lower boundary of its long term trading range, above its 200 day moving average (reverting to support) and above its 100 day moving average (now support). 

The long Treasury was up, ending above it 100 and 200 day moving averages and the lower boundaries of a very short term uptrend, its short term trading range and long term uptrend.  

The dollar rose, finishing right on its 100 day moving averages (now support) and the upper boundary of a very short term downtrend but within a short term downtrend and below its 200 day moving average (now resistance).

            Gold was off, closing below its 100 day moving average---continuing its see saw pattern around this moving average.  It remained above its 200 moving average (now support) and in 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.  If you own enough cash to sleep at night, lay back and enjoy it.
Trading in UUP, GLD and TLT are back out of sync with themselves (sluggish economy, weak interest rates) and with the VIX and stocks.  I remain confused and uncomfortable with the overall technical picture.


            One US datapoint yesterday: October factory orders were down less than expected.  Nothing overseas.

            Investor focus was on the tax bill getting passed.

            More feedback on the senate’s piece of s**t tax bill.

            And Ed Yardini on the corporate tax cut (medium):

            But a government shutdown (12/8 drop dead date) is now starting to draw attention (medium):

            Bottom line: the good news is that the economy is improving.  The bad news, however, is that the negative consequences of an inefficient tax bill and yet another hike in the national debt will, in my opinion, more than offset of the benefits of the current upturn in cyclical growth.

            Update on valuations (medium):

       Investing for Survival
            Notes from an unwelcome future.

    News on Stocks in Our Portfolios


   This Week’s Data

            October factory orders fell 0.1% versus estimates of -0.4%.


            Government debt now surpasses household debt (medium):



  International War Against Radical Islam

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