The Morning Call---This Is Just Mania And, As Such, It Will End.
Value, Growth At A Reasonable Price, Dividend Investing
Seeking Alpha Analyst Since 2010
The Morning Call
9/9/20
The Market
Technical
The Averages (27500, 3331) took another beating yesterday with the S&P finishing below the lower boundary of its short term uptrend (if it remains there through the close on Wednesday, it will reset to a trading range). Clearly, a potential adverse development. On the other hand, the negatives that I have been dwelling on over the last month are dissipating: (1) two of the four gap up opens have been filled, (2) the VIX which was not in sync with stocks as they advanced remains out of sync as they fall, (3) the Markets’ overbought condition is being ameliorated but (4) unfortunately, September’s record as the worst month of the year for Market performance is not going away. And let’s not forget that both of the indices remain above both DMA and in intermediate and long term uptrends.
The worst time of the year.
The Worst Time of the Year Crossing Wall Street
The key in the short term is whether the S&P can hold its short term uptrend. If not, then we are likely in for more downside. But that does not change my current operating assumption that the Market’s bias is to the upside long term---and until QEInfinity/Forever either comes to an end or investors conclude that it has been, is and will be an economic disaster.
Gold was off fractionally, remaining below the uptrend off its March/June lows. Though it held a minor (July/August) support level. Still, its pin action is troubling. Ditto TLT which rose 5/8%, but remained below its 100 DMA. The dollar was up ½% and is trying to make a higher high. But its chart remains the ugliest of those indicators that I follow.
Tuesday in the charts.
Crude Crushed, Tech Wrecked, Banks Battered; Bonds & Bullion Bid
Fundamental
Headlines
The Economy
US
Weekly mortgage applications rose 2.9% while purchase applications were up 2.6%.
July consumer credit rose $12.25 billion versus expectations of up $13.75 billion.
Americans Pay Down Credit Cards For 5th Consecutive Month As Post-Covid Deleveraging Continues
International
August Chinese CPI came in at +0.4%, in line; PPI was -0.2%, also in line.
Other
Permanent job losses still do not match 2008/2009.
States face dire fiscal problems.
With Washington Deadlocked on Aid, States Face Dire Fiscal Crises
Update on seven high frequency economic indicators.
Seven High Frequency Indicators for the Economy
A tale of two recessions.
'A tale of 2 recessions': As rich Americans get richer, the bottom half struggles
There is no recovery.
The coronavirus
How we handled the virus was a mistake.
But Sweden, that is another story.
Sweden Close To Victory Over Coronavirus; Never Had A Lockdown Or Mask Mandate
The Fed
Ron Paul on the Fed’s brilliant new policy.
Ron Paul Pans The Fed's "Brilliant Plan"... More Inflation And Higher Prices
The flaws in Fed policy (must read).
"Averaging" Inflation Does Not Eliminate The Flaws In The Fed's Policy Approach, It Compounds Them
Bottom line. This is just mania and, as such, it will end.
Crowding the Market in Large Cap Tech
Interview with Byron Wien.
Byron Wien: "The Market is Vulnerable"
News on Stocks in Our Portfolios
What I am reading today
David Stockman on crime and punishment.
Stockman Sidesteps 'Systemic Racism', Says Real Evil Is "Relentless Aggrandizement Of State Power"
Quote of the day.
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