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Tuesday, July 10, 2018

Daily update 7/10

A little more upside.

SPX closed slightly above its June high.  Breadth was slightly positive.  New highs were 134.  New lows picked up a bit to 20.  Volume was light once again.  This rally has seen an almost total absence of selling.

After the close the Trump administration announced additional tariffs on China.  The futures do not like that as they are down over 25 points as I write this.  They currently are holding right at the upper channel line which might provide some support.

The green count reached fully overbought levels.

This is when it would be nice to know what money managers are thinking.  I think they were cool with the tariffs that were put in place, but an escalation could change things.  China will undoubtedly do something to retaliate.  At what point do we have a full scale trade war?  As I stated before I do not expect either Trump or Xi to back down.  I have been wondering how long it will take the market to figure that out.  I am not going to try to guess how the next few days will play out.  The market was overbought at prior resistance so a pullback might have been in the cards anyway.  The 20 DMA at 2751 might provide support should SPX trade down there.


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