• Can the market continue ignoring bad news?

    The news of the past two days is that the US/China trade discussions that had been about to conclude are now officially dead in the water.

    As of Friday, everything looked bullish with a Tweet attracting dip buyers.



    The NQ8 MF looks weaker by the day, but it is still well above the Zero level.



    As a matter of fact, we do not see much selling in AAPL/FB/AMZN.







    XLI looked weaker though (China issues).



    The futures still display a very healthy EV pattern here.





    Index investors are still buying





    Materials related sectors seem to be staging an oversold reversal.





    IBB, which had been attracting some money is now again under pressure.



    Finally, Treasuries are bought.





    Conclusions:

    All in all, this market still looks strong. I would really be surprised to see it dropping like a stone.
    We might open low, but I suspect that buyers will come again in the afternoon.

    So yes, I believe that the market will ignore the bad news, especially since it is now out. It will be discounted by a weak morning activity and then it will become a buying opportunity.

    I would be more worried if Chinese retaliation would strongly hit US industrial exporters (CAT, BA, GE, etc,) but the US economy is too strong to be shaken down for now.

    Buy the dip!

    Now, if the 20DMF suddenly heavily dropped below zero, that would trigger a short signal. I do not expect this to happen today. Maybe later this week but then for some other reason than what is today on the headlines.
    Comments 2 Comments
    1. Pascal's Avatar
      Still somewhat negative here: Large investors are selling the bounce for now.

      Wait...


      Pascal

      Attachment 47719
    1. Pascal's Avatar
      With all the bad news floating around, the market seems to be rather strong.



      Pascal

      Attachment 47750