Market Direction: BULLISH alert issued 10/24/2019
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Market Direction Week Review: According
to trade officials in the Trump administration on Tuesday (10/29) the so-called
“phase one” interim trade agreement between the United States and China may not
have been ready in time for signing by President Trump and President Xi, when
the two were scheduled to meet in in Chile next month, but that does not mean
the deal is falling apart. As it turns out, it doesn’t matter, because on
Wednesday (10/30) Chile cancelled the summit due to protests and violence in
Santiago. Trump officials say the two sides are making “great progress” and are
still working to finalize the deal; a signing date will be announced later.
The
Office of the U.S. Trade Representative said this week that “phase two” will
begin as soon as phase one is signed, and that the U.S. might extend certain
tariff exclusions (scheduled to expire on December 28th) on about
$34B of imports from China as the two nations work toward a comprehensive trade
agreement. Likewise, China has vowed to exclude some American farm products
from tariffs. However, it may not matter much, as Chinese trade officials have
recently cast doubts that a comprehensive long-term deal will ever be
reached. China even cautioned that the phase one deal mentioned above was
tenuous because of President Trump’s “impulsive nature”. To reach a larger
deal, China says all current tariffs (and proposed future tariffs) must be
removed first, and that Communist Party structural reform, and government
subsidies are not negotiable.
Separately,
as reported here last week, after 5 straight months of violence and protests,
Hong Kong entered an economic recession in Q3, reporting y/o/y GDP of -2.9%,
which follows -0.4% in Q2. China’s chief economist says the declines are
preventable because they are “completely driven by social events”; he even
predicted negative GDP growth for 2019 as a whole.
This
week in Brexit news: The long-standing deadline of 10/31 for the Brexit to take
place has been postponed once again. The European Union (EU) granted a Brexit
extension until January 31, 2020 despite Prime Minister, Boris Johnson’s “do or
die” assertions that there would be no more delays. Thwarted in Parliament,
Johnson was left with no choice but to request the extension. Then on Tuesday
(10/29) the UK House of Commons voted 438-20 to approve a snap general election
on December 12, which Johnson says will let voters select a new Parliament (or
not) to break the deadlock over Brexit. And so the saga continues.
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Market Direction This Week: We track the stock market based on our Bullish and Bearish Alerts a new Bullish Alert recently started on 9/5/19 and we suggested to our followers they can trade any new long positions based on are model. We will continue to provide you the current stock market conditions as they develop. The current stock market environment is in an uptrend (see Market Direction Mid Week Update: Trading Strategies).
Q3 earnings season is more than two thirds over now. With 358 companies (71%) of the S&P 500 reporting so far.
A steady flow of earnings and economic data are expected to keep investors busy in the upcoming week.
A fairly significant line of technical resistance has finally been broken, and with most of the indicators showing increased optimism and less hedging, there appears to be room for the market to rise at least a little further.
With the SPX hitting new highs already, the consensus for next week is Moderately Bullish again. Don’t forget though, regardless of what the data shows, the usual caveat remains until further notice, “Trump’s tweets still trump everything else”.
Economic Calendar: Factory Orders (11/4), International Trade (11/5), ISM Svcs Index (11/5), Wholesale Inventories (11/8)
Some of the major earnings announcements on deck: CHGG, UBER, FLT, DIS, ROKU.
$tockMarketDirection proprietary model is currently BULLISH. We strongly encourage you to monitor positions closely, exercise proper money management strategies and follow us at $tockMarketDirection for ALERTS we may issue advising a change in the current market direction. Stay tuned and follow us. If you have a testimonial or comment of how this website has helped you we would like to know, email us. Building a community of investors one trade at a time. Share with a friend. Cha-ching!
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