Traders will be watching China this weekend and early in next week when their leaders will likely offer a blunt response to US trade threats. Their press releases indicate that they are ready to go toe to toe - and I don't think they mind what happens to our markets.
It has probably crossed many minds that all this uncertainty benefits those who would like to see the Fed pull back on their rate rise trajectory. When you start to see investment bank heads calling for aggressive Fed intervention it makes you wonder just how worried - or venal - they really are.
Trading the range in a controlled environment is fun, but investors are starting to worry and they might not be buying the idea that there is "a pot of gold" on the other side of what walks and quacks like a trade war. But even in the absence of an escalation, there are likely bigger things going on under the hood.
To that end, today's commentary from the new NEC director and Treasury Secretary only served to strengthen the sell off. This time, tariffs were defended and a trade war was not entirely denied. So much for Wednesday's pep talk.
Interruptions in the world wide supply chain are only one part of the uncertainty feeding investor angst. I reiterate my opinion that these politicians are in over their heads in more ways than this.
SPX/ES/SPY: 2604.47/2605.00/259.72 After an AM futures bounce into the value area and 2656.75, ES gave gradually reversed in the wake of the above commentary. From there the downhill energy increased through the thinly populated spike that took place on Wednesday. ES fell below Wednesday's balance area and below that day's pre-spike area of 2605 and the SPX 200 day moving average until it bounced at 2584.50. The bounce returned price to the aforementioned balance area as the SPX closed just over 2600 psychological support.
Market Internals Advance-Decline Lines: -1661. NYSE Breadth:-11.28:1, NASDAQ Breadth: -4.17:1. NYSE TICK: Cumulative TICK trended lower until 14:45 and then trended weakly higher into the close.. TRIN: 3.02
NYSE MOC: +227M on balance with as much as -1B to sell during the final hour. NYSE composite volume was above average and in line with Tuesday's levels.
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