SPX closed 4 points above the prior intraday high. Breadth was +71%. New highs expanded to 164 for a new rally high. We are in the area of the Nov. and Dec. highs. To be resistance or not to be resistance.
The futures ended the day three points below the 2/21 overnight high. Not breaking new ground despite the good trade talk may indicate a positive resolution is nearly priced in.
Both the U.S. and China say the odds of a deal being made are better than not. That suggests Trump will probably not raise tariffs on March 1. The only thing I have heard they agree on is that China will not use its currency to affect trade. That is nothing new. They have been saying that since day one. There is talk of China buying more agriculture goods over 10 years. I don't think that is a big deal to the U.S. team. They are more into the stealing of intellectual property and forced information transfers. Of course those are likely to be very sticky issues.
The market is clearly focused on trade. I heard Bob Pisani say something to the affect he did not want to say the economic data is abysmal, but it is really bad. Yes, it is Bob. The question is how long before the market refocuses from trade to the poor data. There is currently nothing in the leading indicators to suggest a restrengthening. The data may continue to get worse.
SPX is extremely far above its 50 DMA with possible resistance right here. How is that combination going to work out? Beats me.
Have a great weekend.
Bob
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