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Monday, May 6, 2019

Daily update 5/6

Tariff threat surfaces.

The market gapped down bigly after Trump tweeted about raising tariffs as soon as Friday.  However, investors were not interested in selling into the weakness.  That allowed the market to rally back somewhat.  In the afternoon there was a headline that the Chinese delegation would head to the U.S. as planned which sparked more buying and a gap close.  Breadth was -56%.  New highs were still a decent 111.  New lows picked up to 27.

The futures were hit hard Sunday night.  Today's bounce back carried all the way up to the 20 SMA.  However, they are down in after hours.  I do not know if there was a trade related headline driving that or something else.

The lines are back together again.  This is a braided pattern so far.  That usually indicates some consolidation in the market.

The market rallied back after the gap down, but that does not necessarily mean an all clear.  I think the upside is limited until the threat of tariffs are removed.  If the tariffs end up becoming real then look out below.  Since we can't know ahead of time how this will work out there is not much more I can say.  . 


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