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Monday Morning Chartology

|Includes: Donaldson Co Inc. (DCI), XOM

The Morning Call

7/30/18

The Market

Technical

While the S&P was off on Friday, I had noted that stocks were becoming overbought; so some consolidation is not surprising. The chart remains quite strong with the S&P trading above both moving averages, in uptrends across all timeframes and is currently in very short term uptrend having made four higher highs. The assumption is that it will challenge its all-time high---at the very least.

The long Treasury was up on Friday, bouncing for a second time off the lower boundary of its long term uptrend and its 100 day moving average (negating Thursday’s break, leaving it as support). However, it is below its 200 day moving average (now resistance) and at the low end of the narrowing pennant formation formed by the upper boundary of its short term downtrend and the lower boundary of its long term uptrend.

The dollar remains reasonable strong, technically speaking. It is in a short term uptrend and above both moving averages, with the 100 DMA pushing above the 200 DMA---a positive. While it has not regained its mid-July high, it has made two higher lows.

Ugly, ugly, ugly. The modest up move on Friday notwithstanding, GLD is below both moving averages (with the 100 DMA having crossed below the 200 DMA) and in a short term downtrend. The assumption is that it will challenge the lower boundary of its intermediate term trading range.

Despite the pop in the VIX on Friday, it remained in the area defined by its 200 day moving average on the upside and the lower boundary of its short term trading range on the downside. Meaning that it is not currently signaling a move of any size in stocks.

Fundamental

Headlines

News on Stocks in Our Portfolios

Exxon Mobil (NYSE:XOM): Q2 EPS of $0.92 misses by $0.35.

Revenue of $73.5B (+26.5% Y/Y) beats by $1.83B.

Donaldson (NYSE:DCI) declares $0.19/share quarterly dividend, in line with previous.

Economics

This Week’s Data

US

International

Other

The Commerce Department updated its GDP numbers (medium and a must read):

Surprise: US Savings Rate Twice As Big As Previously Thought

What I am reading today

Notes from the latest Aspen Institute conference (a bit long but an absolute must read):

http://lateralcap.tm00.com/u/Newsletter/xqROQIjYFjK1QD0la8o9ZTC/1826138/2018-Aspen-Ideas-Festival.htm

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Disclosure: I am/we are long dci, XOM.