BRIEF MARKETS UPDATE (9:30 pm EST)
Today all three broad stock market indices (DOW, S&P 500, NASDAQ) made new all-time highs which means we are not going to get an intermarket bearish divergence (sell) signal in the current reversal zone (which ends Thursday). Could this market still top out and reverse down now? Yes, it could. In fact, today's indices closed in the lower half of their day's ranges which is a bearish sign. This market has been bullish in anticipation of "phase one" of a new U.S./China trade deal to be signed tomorrow (Wednesday). Today's market closed low due to a news release announcing that the phase one deal would not include a rolling back of tariffs on China. It is being reported that tariffs on Chinese goods will not be lifted until "phase two" of the deal, which is not expected until after the November presidential election. Wall Street was disappointed, but it may get over it if tomorrow's official signing of the deal presents an optimistic picture of "phase one". If investors really like this new deal, equities could "break out" instead of reversing down. Then again, we may see a case of "buy the rumor (talk of the new trade deal)" and "sell the news (actual signing of the deal)" play out and give us the reversal we've been waiting for. We will stay on the sidelines of all markets until we see how this plays out over the next few days, but be prepared to buy or sell short on quick notice.
Today all three broad stock market indices (DOW, S&P 500, NASDAQ) made new all-time highs which means we are not going to get an intermarket bearish divergence (sell) signal in the current reversal zone (which ends Thursday). Could this market still top out and reverse down now? Yes, it could. In fact, today's indices closed in the lower half of their day's ranges which is a bearish sign. This market has been bullish in anticipation of "phase one" of a new U.S./China trade deal to be signed tomorrow (Wednesday). Today's market closed low due to a news release announcing that the phase one deal would not include a rolling back of tariffs on China. It is being reported that tariffs on Chinese goods will not be lifted until "phase two" of the deal, which is not expected until after the November presidential election. Wall Street was disappointed, but it may get over it if tomorrow's official signing of the deal presents an optimistic picture of "phase one". If investors really like this new deal, equities could "break out" instead of reversing down. Then again, we may see a case of "buy the rumor (talk of the new trade deal)" and "sell the news (actual signing of the deal)" play out and give us the reversal we've been waiting for. We will stay on the sidelines of all markets until we see how this plays out over the next few days, but be prepared to buy or sell short on quick notice.
RSS Feed