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Trend table status

Trend

SP-500

R2000

COMPX

Primary

? 3/31/20

?- 3/31/20

Up 5/29/20

Intermediate

?- 5/29/20

?- 5/29/20

?+ 5/29/20

Sub-Intermediate

Up 4/20/20

Up 4/22/20

Up 4/17/20

Short term

Up 5/20/20

Up 5/20/20

Up 5/20/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Thursday, May 9, 2019

Daily update 5/9

I guess everybody is ready for the tariff increase tonight at midnight.


SPX tested lower this morning, but found support early in the morning and closed well above the open.  Breadth was -56%.  New highs were 63.  New lows spiked up to 86.


 The futures bounced off the 200 SMA.  This is a good place to mount a bounce from.


The red count turned down a bit. 

I am assuming the tariffs are going up tonight.  While everybody will expect the market to go down, it probably will bounce.  It would be like the market to do the opposite.  Besides they have already sold the rumor.  It might be time to buy the news.  If we continue down 2815 should be pretty decent support. 

Here is my theory.  This downturn started with a tweet and caught everybody by surprise.  The big players were all long as there was so much happy talk about a deal being close.  The last few days were mostly about hedging rather than selling.  The big players will engineer a rally from here which they will sell into and get short for the real downturn to come.

I keep hearing people saying both sides want a deal.  I really do not understand that at all.  In no way does China want to make a deal.  They can only lose compared to the way things are  now.  What they want is for Trump to go away.  If I was Xi I would try to look like I was negotiating in good faith while simply waiting Trump out hoping he loses the next election.  There is no way I would make a deal that could possibly help Trump get reelected.  I would try to get Trump to raise tariffs enough to cause the economy to suffer.  The best way to get somebody else elected would be for the economy to tank.  Xi has $3 trillion with which to stimulate the Chinese economy during a global downturn.  Let me see.  Trump has $21 trillion in debt that is rapidly rising.  Borrowing money to stimulate the economy has been shown historically to be ineffective.  Trump gets the blame for the economic downturn because of the tariffs.  That causes somebody else to get elected.  That person will be chicken to do anything with China and Xi looks like a hero.  Exactly why is it Xi needs to make a deal?

Bob


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