ETF Tracker StatSheet
A SEA OF GREEN; TRADE TALK OPTIMISM IS ALIVE AND WELL
[Chart courtesy of MarketWatch.com]
- Moving the markets
It sure seems that complacency rules supreme when it comes to market behavior with yesterday’s bad news, when a bombardment of economic data missed, either being forgotten or at best can be seen in the rear-view mirror. Trade talks between U.S. and China are current front-page news—not much else seems to matter.
Northman Trader summed it up like this:
Bad data doesn’t matter because stocks go up. A China deal will be positive and a catalyst to buy stocks. If there is no real China deal a cosmetic one is good enough. Since bad data doesn’t matter any good data is bullish too. In short, bad news is good news and good news is good news.
It’s blind faith in a system that never has to face any consequences as the central bank put reigns supreme.
Be that as it may, equities opened in a sea of green across world markets thanks to the usual support cast, namely optimism about the trade talks.
The major indexes vacillated above the unchanged line and were never in danger of breaking it to the downside, despite a short-lived mid-day pullback that seemed to do nothing but strengthen the bullish resolve.
The Dow managed to reclaim its 26k level and close above it, while the S&P 500 stormed higher, but did not quite reach its major overhead resistance area, namely the 2,800 zone.
Still, despite this levitation to ever new heights, I wonder if eventually fundamentals, on which stock prices are really based, will kick in and take the starch out of this exuberance. After all, forward earnings are collapsing while the US Macro Surprise Index is not in sync with the S&P 500.
But all that matters right now, however, is the long-term trend, which is up and supported by our Trend Tracking Indexes (TTI). It confirms that the bull is alive and well—at least for the time being.