Trade Tizzy

The overreaction to trade deal news is typical stock market behavior.  A lot of bad things that are happening to the stock market are conveniently being blamed on either the Fed or the trade war.  The Fed has repeated the same message at the start of the year as it has now and somehow the market is going down because of the Fed.  Same thing with the trade war.  It has been the same rhetoric and overreaction to trade headlines for months on end and now somehow the end of the trade war will make everything normal and perfect again.  

Stock market weakness is not about the trade war.  It is about slowing global growth and earnings.  The FANG stocks all issued poor revenue numbers and guidance.  That is the crux of the US stock market problem.  It is not about trade wars or the Fed.  China is not slowing down because of some tariffs.  It has much bigger problems and have made a mockery of their financial system.  The yuan is a joke.  That is their biggest.  Not tariffs.  

We're now working on day 4 of the rally off the bottom, and we are reaching some minor resistance areas around 2760-2770.  Based on the strength of the market in recent days, and the upcoming stock buybacks, there is clearly a change in market character.  Longs are looking a lot better here, and 2800-2820 look like a reasonable price target.   Still long, although I reduced some of my position yesterday.  I might buy back today on a morning dip.  It looks like a rally at least for another week, and will reevaluate at the end of next week.