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Wednesday, February 13, 2019

Daily update 2/13

News that Chinese president Xi might meet with U.S. trade representatives this week while they are in China sparked a gap up.  I don't know if the market is getting a little too excited over nothing or not.  I would point out Trump met with the top Chinese trade negotiator while he was here recently.  CNBC has a reporter on this and she keeps saying people are saying the sides are still far apart.  Trump said he might move the March 1 deadline if things are going well.  The trouble is I can't tell if things are going well or not.  At least they are still talking.

After the gap up on overnight news there was very little buying energy today.  There was some selling energy mid day and again at the close.  That could indicate a short term top may be in the works.  Breadth was +61%.  New highs came in at 89.  New lows were really low at 5. 

The futures show a possible short term double top.  We will just have to wait and see if it comes to pass or not.

The green count drooped a bit, but remains above 50.

The close above the 200 DMA yesterday by SPX did not seem to generate buying enthusiasm today.  That would be normal for this kind of chart pattern.  There should be some selling now.  So we wait and see if it develops. 

Global economic news.

  • South Korea's Unemployment Rate spiked to 4.4% in January from 3.8% in December, hitting its highest January level since 2000. Jobs in the manufacturing sector fell by 170,000 year-over-year.
  • Deputy Prime Minister and Finance Minister Hong Nam-ki said the job market is in a grave situation
  • Eurozone December Industrial Production -0.9% month-over-month (expected -0.4%; last -1.7%); -4.2% year-over-year (expected -3.2%; last -3.0%)
I am not kidding when I say the global economy is doing poorly.  Just take a look at the bullets from South Korea and the Eurozone.  In the U.S, a big spike up in the unemployment rate like SK saw would indicate a recession.  Industrial production is a good indicator of what the economy is doing and so the Eurozone is doing very poorly.  Recession risk is very high there.

I find it curious that Japan and Europe are looking so weak.  They also happen to both have negative rates.  What are their central banks going to do when they fall into recession (I mean besides panic)?


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