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The Morning Call--The Reversion Will Be Mean

Sep. 15, 2020 9:22 AM ET
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The Morning Call


The Market


The Averages (27665, 3383) built on Friday’s advance. However, short term, they remain in a trend of lower highs within a trading range. So, there is still work to do to regain upside momentum. Until that occurs, downside exists to their 100 DMA’s (26208/3159), their 200 DMA’s (26208/3097) and the lower boundary of their short term trading ranges (18213/2991). Of course, longer term their charts are positive. Indeed, the Dow’s 100 DMA is about to cross above its 200 DMA. My current operating assumption remains that the Market’s bias is to the upside long term---until QEInfinity/Forever either comes to an end or investors conclude that it has been, is and will be an economic disaster.

The liquidity boom fueled record stimulus has ended.

Liquidity Boom Fueled By Record Stimulus Has Ended: Equity Market Vulnerable

Gold was back higher continuing its recent see saw trading pattern between a series of lower highs and the July/August minor support level. In other words, consolidating. TLT was down one cent; it too seems to be consolidating. The dollar was down, failing to break the current short term trend of lower highs. All in all, nothing of informational value in the pin action of these indicators.

Monday in the charts.

Small Caps, Big-Tech, & Bullion Bounce As Dollar Dives



The Economy


August import prices rose 0.9% versus estimates of up 0.5%; export prices were up 0.5% versus 0.4%.

The September NY Fed manufacturing index came in at 17 versus expectations of 6.


July UK average earnings fell 1.0% versus consensus of -1.3%; the unemployment rate was 4.1%, in line.

August YoY Chinese fixed asset investment declined 0.3% versus forecasts of -0.4%; industrial production was up 5.6% versus up 5.1%; retail sales were up 0.5% versus 0.0%; unemployment was 5.6%, in line.

The September EU economic sentiment index was reported at 73.9 versus projections of 51.5; Q2 YoY wage growth was +5.2% versus -1.0%.

The September German economic sentiment index was 72.4 versus estimates of 69.8.


Fears of a ‘no deal’ Brexit are rising again.

Brexit Is Back: The Endgame For Investors

Shippers using West Coast ports can’t book rail transportation due to shortages.

"I've Never Seen Anything Like This": Shippers Using West Coast Ports Can't Book Rail On BNSF And Union Pacific

Also, rail traffic posts its first annual jump this year.

US Railroad Traffic Posts First Annual Jump Since The Start Of 2020

Fiscal Policy

Last chance for a stimulus package.


Morgan Stanley doubts it.

Morgan Stanley No Longer Sees A Fiscal Stimulus Deal Before The Election: What That Means For Markets

The coronavirus

‘Smoking gun’ evidence that Covid 19 was created in a lab.

'Rogue' Chinese Virologist Joins Twitter, Publishes "Smoking Gun" Evidence COVID-19 Created In Lab

Trials for AstraZeneca’s Covid 19 vaccine on hold do to ‘serious side effects’.

US Trials For AstraZeneca COVID-19 Vaccine On Hold Amid Probe Into "Serious Side Effect"

Students saddled with economic losses from school closures.

Students have already been saddled with economic losses from school closures

The fragility of herd immunity.


Bottom line. The reversion will be mean.


News on Stocks in Our Portfolios

What I am reading today

Scientists discover possible signs of life on Venus.


The weird space that lies outside our solar system.


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