Entering text into the input field will update the search result below

Monday Morning Chartology

May 10, 2021 9:09 AM ETITW
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Morning Call


The Market


The S&P started the week on its back foot but ended strong---seeming to regain the upward momentum that it lost three weeks ago. Which, as I keep pointing out, would not be surprising given (1) the Fed’s drive to QE Infinity and beyond and (2) Uncle Joe’s goal of dishing out money to every man, woman, child, dog, cat and lizard in the reasonable proximity of the US. So, my bottom line remains: Notwithstanding deteriorating technicals and nosebleed valuations, my Market assumption remains: ‘I can’t see an end to this uptrend as long as the money keeps flowing with abundance and in the absence of any major negative exogenous event.’

Poor Jobs Report Gives Bulls A Reason To Charge 05-08-21 - RIA

Having successfully challenged the uptrend off the March 18 low, TLT attempted a rebound last week but was unable to push through its prior high, lending weight to the notion that it might test that 3/18 low. That doesn’t fit my longer term forecast of weak secular economic growth but does reflect investors’ growing concern that inflation is on the rise as a result of explosive monetary growth and unprecedented fiscal stimulus. I am still not altering my outlook, but I am finding the counter argument increasingly persuasive.

GLD had a big up week, reestablishing a very short term uptrend and breaking above its 100 DMA (now resistance; if it remains there through the close today, it will revert to support). That puts it in tune with TLT’s pin action last week and the ‘higher inflation’ scenario.

The dollar got whacked late in the week and now appears ready to challenge its early January low. If successful, the next visible support exists at the lower boundary of its intermediate term trading range. Its price action suggests investor concern about higher relative inflation or lower relative economic growth (or both) in the US versus the rest of the globe.

Friday in the charts.

Gold Surges To Best Week In 6 Months, Crypto Soars As Dollar Crashes



The Economy

Review of Last Week

US statistical releases were downbeat last week with the primary indicators weighing three to one on the negative side. It could be nothing more than just overly enthusiastic coronavirus recovery forecasts. Because it was not a matter of the numbers being negative or (in most cases) not showing substantial improvement; it was a function of them not meeting expectations. I qualified that last statement because one stat---April nonfarm payrolls---showed a huge shortfall from estimates. And that is a big important datapoint.

Of course, this is only one week’s numbers. So, it is way too soon to start claiming that my forecast is becoming manifest. But clearly, it could be an early sign.

Overseas, the data flow was again positive side, in fact, extremely so. That is two in a row; so maybe the rest of the world is starting to catch up to the US. I need a bit longer trend to be convinced of that.

Bottom line. ‘As you know my opinion is that following an initial snapback, the US economy will likely return to its former subpar secular growth rate, stymied by irresponsible mix of fiscal/monetary policies.’---which are only getting more irresponsible.




The Fed

Explain again how making the 1% richer creates more jobs (must read).

Hey Fed, Explain Again How Making Billionaires Richer Creates Jobs

Bottom line. Are we entering a mid-cycle transition?

Morgan Stanley Says "Rather Than Getting Excited, It's Getting More Concerned"

News on Stocks in Our Portfolios

Illinois Tool Works (NYSE:ITW) declares $1.14/share quarterly dividend, in line with previous.

What I am reading today

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 itw.

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.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.