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Monday Morning Chartology

Dec. 13, 2021 9:01 AM ETCVS
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Value, Growth At A Reasonable Price, Dividend Investing

Seeking Alpha Analyst Since 2010

Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 46 years of investment experience includes institutional portfolio management at Scudder. Stevens and Clark and Bear Stearns, managing a risk arbitrage hedge fund and an investment banking boutique specializing in funding second stage private companies. Through his involvement with Investing for Survival and Seeking Alpha, Steve hopes that his experience can help other investors build their wealth while avoiding tough lessons that he learned the hard way.

The Morning Call


The Market


The S&P bounced off its 100 DMA---as one would expect in a strong market. That likely means an imminent challenge of the upper boundary of its recently reset short term trading range. If successful, the Santa Claus rally will be alive and well.

On the other hand.

BofA: "The Bubble In Speculative Froth Has Popped Resulting In Epic Divergences"

TLT traded down last week (rates up), but (1) it is still in very short term uptrends off its March and October lows and (2) remains above both DMA’s. This is supportive of the notion that inflation will not be the problem many think but rather it is that ‘Powell waited too late to get hawkish and now the Fed will be tightening into a weaker economy---thereby making it even weaker.’

GLD was flat on the week. Like the long bond, it is not really trading like investors are worried about inflation. I have put in the boundaries (red lines) of what looks like a developing pennant/flag formation. That suggests the gold will trade in an ever narrowing price range until it breaks up/down which would then be indicative of future price direction.

The dollar was also directionless. But longer term, its pin action is more indicative of a deflationary/noninflationary environment versus an inflationary one.

Friday in the charts.

Omi-Gone? Stocks Soar As Scariant & CPI Send Bonds, Bitcoin, & The Buck Lower On The Week



The Economy

Review of Last Week

The US stats were negative last week as were the primary indicators (two negative, none positive). Overseas, the data were overwhelmingly negative, putting to rest any doubt that a recovery was in sight.

My take on the economy remains unchanged---it is struggling to grow, hampered by increasingly irresponsible monetary and fiscal policies, getting no support from the global economy and threatened by seemingly mounting inflationary forces---though the Markets continue to question the latter point.



November German PPI came in tat 1.3% versus estimates of 1.1%.


News on Stocks in Our Portfolios

CVS Health (NYSE:CVS) declares $0.55/share quarterly dividend, 10% increase from prior dividend of $0.50.

What I am reading today

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Analyst's Disclosure: I/we have a beneficial long position in the shares of CVS either through stock ownership, options, or other derivatives.

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