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The Morning Call--Safety Trade Or Higher Rates?

Sep. 24, 2020 9:10 AM ETACN, FDS
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The Morning Call


The Market


The Averages (26763, 3236) maintained their downward move (very short term downtrend), posting a new lower high on increased volume and weaker breadth. While I continue to believe that the long term bias is to the upside, the immediate trend is clearly down. The good news is that both indices have multiple support levels in near proximity: their 100 DMA’s (26208/3159), their 200 DMA’s (26208/3097) and the lower boundary of their short term trading ranges (18213/2991).

Gold got whacked again, finishing below the July/August minor support level for a second day. While its long term trends are up and support exists at its 100/200 DMA’s, this recent negative pin action can’t be ignore. TLT rebounded slightly. That is a plus, but it continues to struggle to push above the trend of lower highs and its 100 DMA (now resistance). The dollar jumped another ½%, ending above the upper boundary of its short term downtrend (if it remains there through the close on Friday, it will reset to a trading range) and setting a new higher high.

If the dollar successfully challenges its short term downtrend, it would suggest either a move to a safety trade or higher interest rates. But TLT is resisting a move lower (higher interest rates) and is trying to push higher (safety trade). On the other hand, GLD is breaking down, pointing to higher rates or a move away from a safety trade. Of course, the drop in equity prices can mean higher rates or a retreat to safety. In short confusion. Time to be careful.

VIX term structure shows rising uncertainty.

For Volatility Traders, November Election Will Be A Career "Maker Or Breaker"

Interactive Brokers hikes margin requirements.

Interactive Brokers Hikes Margins By 35% Ahead Of Election Market Chaos

Wednesday in the charts.

Dollarnado Slams Stocks, Gold, & Silver As Election Angst Spreads



The Economy


Weekly jobless claims rose by 870,000 versus consensus of 843,000.

870,000 Americans Filed For First-Time Unemployment Benefits Last Week

The September flash manufacturing PMI came in at 53.5 versus forecasts of 53.1; the services PMI was 54.6 versus 54.7; the composite PMI was 54.4 versus 53.0.


The September German business climate index was reported at 92.6 versus expectations of 93.0; the current conditions index was 87.9 versus 89.0.


The coronavirus

Overnight update.

Trump Threatens Veto Of New COVID-19 Vaccine Rules; France Imposes New 'Social Distancing' Restrictions: Live Updates

Liberty or lockdown.

Liberty or Lockdown

Bottom line

Estimating future stock returns.

Estimating Future Stock Returns, June 2020 Update

The most dangerous investment move you can make (must read).

The Most Dangerous Investing Move You Can Make

News on Stocks in Our Portfolios

FactSet Research Systems (NYSE:FDS): FQ4 Non-GAAP EPS of $2.88 beats by $0.35; GAAP EPS of $2.29 misses by $0.05.

Revenue of $383.6M (+5.3% Y/Y) beats by $4.86M.

Accenture (NYSE:ACN): FQ4 Non-GAAP EPS of $1.70 misses by $0.03; GAAP EPS of $1.99 beats by $0.26.

Revenue of $10.84B (-2.0% Y/Y) misses by $90M.

Accenture (NYSE:ACN) declares $0.88/share quarterly dividend, 10% increase from prior dividend of $0.80.

What I am reading today

Why isn’t Jamie Dimon going to jail?

JPMorgan To Pay Record $1 Billion Settlement Over Precious Metals, Treasury Manipulation

School bus sized asteroid will ‘buzz’ earth today.

Watch Live: "School Bus" Sized Asteroid Expected To Buzz Earth Thursday

Visit Investing for Survival’s website (Home | Investing for Survival | Investingforsurvival.com) to learn more about our Investment Strategy, Prices Disciplines and Subscriber Service.

Analyst's Disclosure: I am/we are long acn, FDS.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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