After another ugly reversal, this time because of a raid on the Trumpster’s lawyer’s everything, we sarcastically tweeted to not worry, the market will just gap back up 300 points. It was sarcasm. It was a joke….but that’s what the market is doing right now. You cannot blink. You cannot go home being bullish or bearish as it will change in the morning. And then as reported:
“This morning’s bullish bias has been attributed to comments made by China’s President Xi Jinping, who spoke at the Boao Forum overnight. Mr. Xi discussed plans to further open the Chinese economy, including “significantly” reducing import tariffs for automobiles, reducing tariffs for other goods, improving market access for foreign investors, and better enforcing the intellectual property rights of foreign firms — which has been a major point of contention for the Trump administration. While Mr. Xi never outright mentioned heightened trade tensions between the U.S. and China, his comments certainly soothed markets around the world, which have been jittery in recent weeks due to the prospect of a trade war between the world’s two largest economies. The major stock indices in Asia finished Tuesday on a higher note, with China’s Shanghai Composite (+1.7%) and Hong Kong’s Hang Seng (+1.7%) leading the charge, while the major indices in Europe are also in the green, sporting gains between 0.5% and 0.9%.
So another big gap to the upside this morning. We have been asked what we now think will happen. Sorry…we are not the Amazing Kreskin but we do have some thoughts. This action has been insane the past 10 trading days after an ugly drop. Reality is in spite of whatever news we are pounded with, those longer-term support levels we have outlined for you in recent days continue to hold…and today’s open gives the market a chance to move away a bit from that ledge. We have also told you we are doubtful of what kind of move we can get if the lows do indeed hold but the longer markets back and fill, the better chance for a better move. SO…not putting the cart before the horse but if we DO NOT reverse today, it would be very good news. We suspect this holds but we promise you that the market doesn’t give a #%#@ what we think. We’ll just let the market do its bidding here. Most areas, most indices and most everything have done an almost perfect revisit to the Feb 9 lows. Let’s hope all of this turns out to be THE lows.