June 30, 2019
Weekly Market Outlook
By Keith Schneider
The performance of the US Equities markets was a mixed bag as the Dow, NASDQ 100, and the S&P 500 closed down on the week. Meanwhile the IWM which has been lagging since the fall of 2018 came alive Friday, rallying +1.6% and closed in an unconfirmed bullish phase.
The G20 meeting in Japan culminated in a meeting with President Trump and President Xi agreeing to talk more, keeping current tariffs in place but not escalating them any further, or what could be considered a timeout.
In a surprise moment, Trump agreed to ease some trade sanctions on China’s premier telecommunications company, Huawei Technologies Co, LTD and then jetted off to an historic visit to meet with Kim in the Korean Demilitarized Zone.
The decision to lift a trading embargo with Huawei could spark a rally in Semis and Tech and spread to the rest of the market as it is at the forefront of the trade war.
The chatter on the web regarding the market impact of the G20 meeting and Trumps meeting with Xi is very mixed. One thing is clear, there is still a trade war underway with tariffs ongoing. Agreeing to chat is not a solution but it’s a lot better than not talking, so it’s likely that we have a grind higher assuming talks continue. Not to be a wet blanket, but it’s possible that markets were hoping for more and respond poorly.
Once again, in this environment price action is the best arbiter as we are in uncharted waters. Short term price action using the Opening Range is one of the best ways to stay flexible when large market gaps occur and markets are running on pure emotion.
This is also a perfect example of understanding how markets operate. It’s the actual response of the markets relative to consensus expectations to news that inform us as to the true underlying trend.
This week’s highlights are:
For this week's video click below.
Best Wishes for your trading!
CEO – MarketGauge.com