Monday, July 23, 2012

Monday Morning Chartology-Europe just keeps getting worse


The Market

Technical

Monday Morning Chartology


While the primary trends in the S&P are firmly in tact, the pin action last week was a bit confusing on a shorter term basis. It broke above the 1364 interim resistance level as well as the upper boundary of a developing pennant formation.

That break was sustained for two day, then the S&P fell back (1) below the 1364 level, negating the break (2) and closed right on the upper boundary of that pennant pattern. Under our time and distance discipline that doesn’t negate the break but it does extend the time element by another day. Let’s see where the S&P finishes today with respect to the pennant’s upper boundary.

Europe just keeps getting worse


GLD continues to meander around the bottom quadrant of an intermediate term trading range. As long as it holds the lower boundary of that trading range, our Portfolios will Hold their positions.




The VIX remains above the lower boundary of its intermediate term trading (and neckline of a developing head and shoulder formation). A break of that boundary would be a plus for stocks.





Update on ‘the best stock market indicator ever’:
http://advisorperspectives.com/dshort/guest/John-Carlucci-Best-Indicator-Ever-Update.php

Fundamental

Over the weekend, one Spanish province said that it needed a bailout; several others hinted that they weren’t far behind---and Spanish yields soar.. Meanwhile, Italian provinces appear to be lining up to follow Sicily into bankruptcy. And lest we forget, there is talk again of a Greek exit from the euro.

Under the category of ‘they still don’t get it’ (medium):
http://www.zerohedge.com/news/guest-post-spains-banking-reform-bailout-status-quo

And it now appears that August 20 is the next critical date for Greece (short):
http://www.zerohedge.com/news/no-more-mr-nice-guy-imf-set-kick-out-greece

Politics
Domestic


Thoughts on the war on drugs (medium):
http://www.nationalreview.com/articles/310104/drug-war-recedes-rich-lowry


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 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.