Today, some very interesting things happened. If you know how to read between the lines of what POTUS is saying in the news. If you can tie the latest lame stream news narrative into what POTUS is conveying to companies as the trade war heats up. You have a chance to understand what is coming. What is already in progress and has been in progress for some time. But now we are nearing the end stage event(s). If you have been following X22, you will know exactly what I am talking about (refer to this evening's post on X22 (use Steemit). Please understand, I am not on this board for my own personal benefit. I get nothing out of being here other than to help you folks to the extent that I can. And I am not likely to be around a whole lot longer for reasons associated with these events and also because I will likely be following a different path once I retire (soon).
Let's get to my usual narrative and then I'll weave a bit more info relative to the above post.
Once again, news drove the action. The market reacted to China's tariff response and POTUS later in the day gave companies fair warning to leave China and come back to the U.S. or they may not like the results of any decision to do otherwise. Price dove as a result with losses on the majors in the neighborhood of 2.5% on the day. That puts price back near the bottom of the trading range both above and below the 200 dma. Volume was elevated on the downside once again. The down days have tended to have more volume than the up days for a few weeks now.
Breadth flipped negative again. My intermediate term system is now backing away from the possibility of going positive (and remains negative).
The OEX is on the bearish side for Monday. The CBOE is neutral. NAAIM is not as bearish as of last Thursday, so I don't think the market falls apart in the short term. There is a battle over control of price direction that is heating up. The jaw-boning is part of it. Both sides have the ability to shake the market, but POTUS has the upper hand. That just means the market is likely to fall apart only when certain parties are ready to pull the switch. If you thought the market was free and open, you are mistaken. It has been decades since that has been the case (read Creature From Jekyll Island).
So, price is now testing its lows. We'll have to see if support holds and to what extent. We are likely to bounce early next week, but that's about all I can anticipate given the current indicators. It is still possible that the market eventually finds its way back to new highs, so I don't want to give the impression that it's time to get on the sidelines, though I would not blame anyone if they did (I am in the G fund). I am hoping I can give you early enough warning of the bigger market event that is coming, but I certainly can't guarantee such.
My best estimate is perhaps 1 to 3 months, but take it with a grain of salt.
Do not look in the rear view mirror and think you know what is coming. Where we are headed is going to completely change our perceptions of financial reality as events play out. Go to X22; you'll get a more detailed understanding.
