Welp, here we are again, we start with the good news to push the market higher, and then days before the g20 actually happens Kudlow..the President...Banks...they all throw out all the "worst case scenarios" to try and scare all market participants away before the meeting. This way, when the meeting does happen, everyone has the "worst possible scenario" in their head.
Now pending Trump/Xi don't get into a fight at their meeting, odds are they will walk away talking about how great negotiations are going. And poof goes the market. I'm expecting we push back up into the green box one more time before the sell-off. Couple things to keep in mind here:
1. Remember how the last G20 meeting went? Fantastic! Tariff truce for 90 days, the market had a gap up blow-off top the very next day, and we went straight down to the December lows.
2. You need to pick your way through the BS and take in what matters. China is WILLING to do a fair balanced trade deal. The problem is, the U.S. doesn't want a balanced deal. They want a deal where they win, as "payback" for China's actions over the years. China don't want to have to buy extra U.S. exports because the U.S. says so. And why would they? It's not China's fault that we can't manufacture our own goods and depend on them so their is a trade deficit. China's the big brother that stole all our candy when we was little, and now we're finally old enough to realize it and expect them to give it back.....
3. Typically when we see a Wedge pattern play out, the second to last wave up or down before a wedge breaks either bearish/bullish will FAIL to re-test the support/resistance line. If somehow we get a crazy sell-off off of this news, and do not make new highs first, we will have most likely failed to re-test the upper resistance line of the wedge. Meaning, the likely-hood of the markets breaking the lower trendline increases. Things could get pretty nasty from there...breaks are impulsive, not really any support until the 2007 highs.
Now pending Trump/Xi don't get into a fight at their meeting, odds are they will walk away talking about how great negotiations are going. And poof goes the market. I'm expecting we push back up into the green box one more time before the sell-off. Couple things to keep in mind here:
1. Remember how the last G20 meeting went? Fantastic! Tariff truce for 90 days, the market had a gap up blow-off top the very next day, and we went straight down to the December lows.
2. You need to pick your way through the BS and take in what matters. China is WILLING to do a fair balanced trade deal. The problem is, the U.S. doesn't want a balanced deal. They want a deal where they win, as "payback" for China's actions over the years. China don't want to have to buy extra U.S. exports because the U.S. says so. And why would they? It's not China's fault that we can't manufacture our own goods and depend on them so their is a trade deficit. China's the big brother that stole all our candy when we was little, and now we're finally old enough to realize it and expect them to give it back.....
3. Typically when we see a Wedge pattern play out, the second to last wave up or down before a wedge breaks either bearish/bullish will FAIL to re-test the support/resistance line. If somehow we get a crazy sell-off off of this news, and do not make new highs first, we will have most likely failed to re-test the upper resistance line of the wedge. Meaning, the likely-hood of the markets breaking the lower trendline increases. Things could get pretty nasty from there...breaks are impulsive, not really any support until the 2007 highs.
Held and Broke Out into new highs today, but as expected, there was "no volume".
The volume was actually great today, much like it was on the December bottom half day, but the charts print a bad volume day because of it.
Do the algos say, " Breakout on no volume, it's a false break, sell!"? Or will this time be different. Still have a little room to the red trendline though. Maybe a gap up Friday with a close down? I'd like to think a bad jobs number could cause a big gap down below the highs we broke above, but since when has bad news ever been a reason to sell this market lol