Bear Trap, Bull Trap, Chop Chop! When the market action is driven by pure technicals and market-propping/bashing headlines, it could be prudent to sit on the sidelines to discern some clarity. While the bull trap we cautioned about has materialized fully, the market is now right in the middle of precariously stubborn support (more…)
Fed to the Rescue? Investors are trying to calm down with the hopes that the Fed would come to the rescue of the markets, especially with the Feds’ hinting of brewing economic troubles. Whether these are self-inflicted wounds (trade war, anyone?) or not, monetary policy maneuvers (or, just the posturing) could stop some bleeding on (more…)
Start-of-the-new-trading-month Factor to Trump Geopolitical Anxieties Today? Financial markets fell to new lows in the overnight futures market, but our models indicate potential for a bear-trap with the new-trading-month-start fund flows working to support the markets today (think 401-k, DRIPs, and other systematic/automatic investing fund flows). While the geopolitical situations are not getting any better (more…)
Reckless Ignorant Amateurism or Masterful Strategic Dealmaking? Financial markets are getting spooked with Trump’s surprise Mexico tariffs threat overnight and the market technicals are severely damaged in the overnight futures action. Political populism works until it hurts the common man in the pocket, and when it does, it could get unforgiving for the players. Would (more…)
Can’t Snooze our Way Out of This Trade-war Escalation! The administration seems to be caught off guard with their naive approach to believing that they could just bulldoze their way through the trade negotiations with the world’s second largest economy! Hitting the snooze button does not reset the time-sensitivity for finding a way-out of the (more…)
Publicly Bullying a Nation’s Pride Makes Not For a Deal-making Strategy! With no major economic or earnings releases on the horizon, markets to obsess over the deteriorating US-China trade dispute situation. Falling yields are beginning to spook the investors. Public bullying of a sovereign nation’s pride seems to have brought us here (we need “diplomats” (more…)
Consumer Confidence and Geopolitics The release of consumer confidence numbers at 10:00am ET may likely be less critical than the yo-yo moves of the investor sentiment surrounding the US-China deal and other geopolitical headlines. When the financial markets’ hope or despair involve politics and not economics, there is something not normal about the state of (more…)
Squaring off Short Positions Before the Long Weekend? With Trump trying to prop up the markets, the institutions and the big players seem to be playing the usual trick: take the “path of the maximum pain”. While many might have got sucked into short positions yesterday – believing that the markets are doomed – they (more…)
Whipsaw Price Action to Dominate The directionless trading conditions appear to continue into today’s session, with occasional whipsaw moves in either directions. As we wrote yesterday morning, the FOMC meeting minutes’ release ended up a non-event as the geopolitical headlines drove the market sentiment yesterday, and likely continue into today. Our models are waiting for (more…)
Directionless Trading to Continue The directionless trading conditions appear to persist in the markets. Today’s FOMC meeting minutes’ release feels like a non-event as the Fed seems to be losing its relevance in the current administration. Caution is advised against going short while the index is above 2848 and going long while under 2875. Below, you (more…)
