Mixed messages from SPX
What a wild ride this has been!
Late last night, the Chinese President delivered a speech that eased trade-war fears, as there were several items he "promised" they were doing or going to do. Of course, most of these things were things we've heard them say they'd do before, so it was all posturing in my opinion. Talk is cheap... show me the goods! I digress.
The markets began rallying broadly all across the globe, excluding Russia, of course. However, the rally today, although impressive in some respects, still doesn't give the all clear, and there are still several concerning items. First, C.P.I. and P.P.I. (consumer price index and producer price index... inflation gauges, in short) data was released this morning that was stronger than expected. While that bodes well for our economy, it also may induce the Fed Res to hike rates quicker or more than the market expects.
All that aside, the market closed today under a key resistance after rising above it intra-day. We'll need to see some follow thru before I'm a believer. Several indicators are still a "sell" and intra-day action clearly shows that there are a lot of sellers overhead that the market must clear before any meaningful advance can take place.
I've added some targets to the upside and I still have the downside targets shown. Near term, bulls need to push thru resistance at 2649-2663, whereas bears need to push us below 2554. In other words, I'm pretty neutral at the moment... I'm buying select stocks, but I'm also still hedged against a continuation lower (via SPY $262 puts).
Finally, some other signals that I would like to see is the VIX to break below 20 to give confidence that a rally can be sustained. I also want to see bond yields advance, especially the US 10 year treasuries. Whichever way you want to play, just keep it on a tight leash because I don't think we're out of the woods yet, and I still believe that upside potential is modest compared to downside potential!
Happy hunting!
Late last night, the Chinese President delivered a speech that eased trade-war fears, as there were several items he "promised" they were doing or going to do. Of course, most of these things were things we've heard them say they'd do before, so it was all posturing in my opinion. Talk is cheap... show me the goods! I digress.
The markets began rallying broadly all across the globe, excluding Russia, of course. However, the rally today, although impressive in some respects, still doesn't give the all clear, and there are still several concerning items. First, C.P.I. and P.P.I. (consumer price index and producer price index... inflation gauges, in short) data was released this morning that was stronger than expected. While that bodes well for our economy, it also may induce the Fed Res to hike rates quicker or more than the market expects.
All that aside, the market closed today under a key resistance after rising above it intra-day. We'll need to see some follow thru before I'm a believer. Several indicators are still a "sell" and intra-day action clearly shows that there are a lot of sellers overhead that the market must clear before any meaningful advance can take place.
I've added some targets to the upside and I still have the downside targets shown. Near term, bulls need to push thru resistance at 2649-2663, whereas bears need to push us below 2554. In other words, I'm pretty neutral at the moment... I'm buying select stocks, but I'm also still hedged against a continuation lower (via SPY $262 puts).
Finally, some other signals that I would like to see is the VIX to break below 20 to give confidence that a rally can be sustained. I also want to see bond yields advance, especially the US 10 year treasuries. Whichever way you want to play, just keep it on a tight leash because I don't think we're out of the woods yet, and I still believe that upside potential is modest compared to downside potential!
Happy hunting!
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.