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Friday, October 18, 2019

Update 10/18

Sorry for not updating more.  I have been working feverishly on the book, but that is not the only reason.  The truth is I do not know what to say.  The market has been getting whipped around on headlines.  I have been mostly day trading over the last few weeks due to unpredictability of news headlines.  Some of those headlines have even caused big intraday moves.  One must be nimble to trade in these conditions.

On news of a phase one deal with China SPX jumped above 3000.  However, it has not been able to stay there so far.  Is this a consolidation to go higher or another short term top forming?  Breadth on this bounce has been ok, but nothing to write home about.  If this market is going to break out and go higher we need to see stronger breadth readings.

The futures have been sideways the last few days.  They tested the 20 SMA today, but held.  The 50 and 20-0 SMAs are close together.   A break of those MAs would probably be a sign the market is rolling over again. 

This week the IMF said the global economy is in a synchronized slowdown. That makes it harder to turn things around.  The last JOLTS report showed the lowest number of job openings in the last 17 months.  The U.S. is being dragged down a bit.  China seems to be backing off from the deal that was announced but was not in writing.  A deal is not a deal until it is signed.  I don't think it is safe to assume that will happen this year.  I can understand the hesitation to bid up stocks here.  We will have to wait and see if some news can push SPX to new highs.  If that happens then we will have to make sure it stays there.  While we are waiting we have to watch for a roll over.  I don't see anyway to predict what happens in the near term.

Have a great weekend.  Peace.


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