The Morning Call
3/13/18
The
Market
Technical
The indices
(DJIA 25178, S&P 2783) couldn’t successfully challenge its prior high
yesterday. Not that it won’t occur
today. But as of this moment, the very
short term momentum remains down. Volume was down, remaining at a low level. Breadth was mixed. That said, the Averages are above both moving
averages and within uptrends across all major timeframes. The technical
assumption is that long term stocks are going higher. However, the indices are now stuck in a
narrowing range defined by lower highs and higher lows. In addition, they need to overcome their
former all-time highs before we have an all clear signal.
The VIX was up 7
¾ %, but still ended below the lower boundary of its short term uptrend for a third
day, resetting to a trading range. This pin action may be anticipating a
drop in volatility, which would be a plus for stocks.
The long
Treasury rose ½ %; quite a good performance on a day of a large series of Treasury
offerings. Nonetheless, momentum remains
to the downside.
And,
Fed admits yield curve collapse matters:
And, strong Treasury
auction:
The dollar was
off again, seemingly unimpressed with the positive Treasury offering. It remains an ugly chart.
GLD was flat. Momentum remains to the upside, but it must still
overcome a very short term downtrend.
Bottom line: the
technicals of the equity market point higher for the long term; though on a
very short term basis Monday’s pin action was disappointing. TLT, UUP and GLD drifted aimlessly.
Fundamental
Headlines
Yesterday
was a slow day. The only data release
was the February budget deficit which was a big number but in line with
forecasts. The only other newsworthy
item was the better than anticipated reception of the large Treasury auction
mentioned above.
Bottom
line: the federal budget is out of control, the Fed refuses to take control,
Trump is in control, and I am just not sure exactly how positive that is. Stocks are overvalued. I love the cash I own.
Private
equity firms brace for a selloff (medium):
The
latest from Jim Grant (medium):
News on Stocks in Our Portfolios
Economics
This Week’s Data
US
The
February US budget deficit was $215.2 billion versus expectations of $216.0
billion.
The February small
business optimism index was reported at 107.6 versus estimates of 107.0.
February CPI came in at
+0.2%, in line; ex food and energy, it was up 0.2%, also in line.
International
Other
Trend
in new home sale prices (medium):
The
great jobs collision (medium):
The
Fed and interest rates. I don’t agree
with this guy; but I include the article in the interest of providing all
points of view (medium):
BIS
warns of risks in banking system (medium):
Is
the US economy becoming more stable?
This is a recurring theme with this author. I am not sure I agree; but his thesis bears
consideration (medium):
Goldman
on a global trade war (medium):
Is
global synchronized growth ending?---assuming it ever started (medium):
What
I am reading today
Coercion and abuse inside
the Riyadh Ritz Carlton (medium):
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