Monday Morning Chartology
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Seeking Alpha Analyst Since 2010
The Morning Call
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
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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