We have witnessed incredible volatility for much of the summer from basically late May into current date. Based on technicals, fundamentals and the face of the many social/monetary/geopolitical issues around the world, I see virtually no chance this volatility will end.
There are essentially three main possibilities, however, the main key will be whether we can surpass the 3009-3010 level which represents the major baseline that resulted in two failures of making ATHs the second time-around.
While bulls may want to make a new ATH, in practical actuality this would likely be the worst outcome because the waterfall that would occur as a result could cause panic. My preference which has been consistent for the past 6 months is continued volatility and zig-zag correctional moves with a final rally (2840-2890 finish) to end 2019 with a low sometime in November near 2740-2780.
While many traders are in great awe of the "Phase 1 deal" between USA-China, in actuality, this will end up resulting in extreme false optimism; keep in mind for one, no major key governmental structural issues that Trump has been a proponent against has been discussed, written or signed for as those are reserved for Phase 2 and 3.
Essentially, the mess that Trump caused with farmers originally has been somewhat reversed is the main part of this "deal". However, he also caused many to be bankrupt so the damage may have already been done.
The lack of a complete deal will do limit to change poor economic data and halt global economic deterioration with the end-result bringing intense complacency and false optimism. In reality, we could very well see a re-escalation of the trade war as Phase 2 and 3 get discussed.
Overall, I see this "deal" as nothing more than a tactical move by the Chinese to prevent a current escalation and a reason for Trump to post-pone current tariffs.
Traders must remain very cautious in trading the remainder of 2019 and be even more cautious through 2020. High growth and high debt stocks could get ravaged over the immediate term and through the next 12 months and traders must react swiftly to preserve capital.
The time is now to see if this market can hold itself upwards with a half-ass (unsigned) trade deal and likely no additional rate cuts for 2019.
- zSplit
There are essentially three main possibilities, however, the main key will be whether we can surpass the 3009-3010 level which represents the major baseline that resulted in two failures of making ATHs the second time-around.
While bulls may want to make a new ATH, in practical actuality this would likely be the worst outcome because the waterfall that would occur as a result could cause panic. My preference which has been consistent for the past 6 months is continued volatility and zig-zag correctional moves with a final rally (2840-2890 finish) to end 2019 with a low sometime in November near 2740-2780.
While many traders are in great awe of the "Phase 1 deal" between USA-China, in actuality, this will end up resulting in extreme false optimism; keep in mind for one, no major key governmental structural issues that Trump has been a proponent against has been discussed, written or signed for as those are reserved for Phase 2 and 3.
Essentially, the mess that Trump caused with farmers originally has been somewhat reversed is the main part of this "deal". However, he also caused many to be bankrupt so the damage may have already been done.
The lack of a complete deal will do limit to change poor economic data and halt global economic deterioration with the end-result bringing intense complacency and false optimism. In reality, we could very well see a re-escalation of the trade war as Phase 2 and 3 get discussed.
Overall, I see this "deal" as nothing more than a tactical move by the Chinese to prevent a current escalation and a reason for Trump to post-pone current tariffs.
Traders must remain very cautious in trading the remainder of 2019 and be even more cautious through 2020. High growth and high debt stocks could get ravaged over the immediate term and through the next 12 months and traders must react swiftly to preserve capital.
The time is now to see if this market can hold itself upwards with a half-ass (unsigned) trade deal and likely no additional rate cuts for 2019.
- zSplit