Chris Temple from The National Investor – Mon 6 May, 2019

More Trump Tweets and Trade War Concerns

Well here we are forced again to discuss a tweets sent out by President Trump and the US/china trade war. On Sunday Trump sent out the tweet below…

For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….— Donald J. Trump (@realDonaldTrump) May 5, 2019

….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!— Donald J. Trump (@realDonaldTrump) May 5, 2019

Chris Temple and I look at the market moves so far today and try to understand the strategy behind Trump pushing the Fed to change policies to support he market but then tweeting the above. We also discuss the potential opportunities for investors now that some fear is back in the markets.

Click here to visit Chris’s site for more market and economic comments.

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Comments:
  1. On May 6, 2019 at 11:18 am,
    cfs says:

    Trump’s tweets are just putting pressure on Chinese negotiators who will be in Washington this week.
    The inside info indicates that agreements has been reached on intellectual property rights, but not enforcement of same.
    Trump is a deal-maker. We are watching negotiations; that is all.
    I predict there will be an agreement. China needs to sell; more than the U.S. needs to buy.
    (I suspect part of the problem also was a Chinese attack on the dollar, which prompted a reacion from Trump.)

    We need a correction in the stock market, anyway, simply to get P/E ratios and the like back to more reasonable values. Nothing goes linearly ever-increasing, without oscillations, or set-backs.

    • On May 6, 2019 at 1:28 pm,
      Temple says:

      CFS, where/how did China “attack” the dollar??? I’m confused…esp since both sides would like to see, at this point anyway, a stronger yuan/weaker dollar.

      • On May 6, 2019 at 3:04 pm,
        cfs says:

        Atack is perhaps a too strong a word. When some Chinese-owned treasury notes matured at the end of April, they did not re-invest in anything involving U.S. dollars.
        A month earlier, at least they bought soybeans with U.S. Dollars to keep currencies stable.

        • On May 6, 2019 at 3:18 pm,
          cfs says:

          I don’t have a full grasp at what is going on, but there seems to be a decrease in demand for North American Agricultural products, but a relative increase in South American ones.

    • On May 6, 2019 at 1:29 pm,
      Temple says:

      Indeed, among other things China JUST did was to put back in place some capital controls to keep DOLLARS from leaving China.

  2. On May 6, 2019 at 11:49 am,
    spanky says:

    Looking at cloud resistance for GDX, it looks like sideways at best for the next couple of months. Mid July is the fist weak spot in the cloud. I wouldn’t expect a move above $21 before then. Between now and mid July we may get crazy up and down action.

    Is it possible I am wrong and it just takes off? Sure, but it would have to be a massively powerful move, and I just don’t see that right now. More slow grind. Plus, any move higher from here in the miners will probably be shorted with impunity at the rapidly declining 50 dma.

    • On May 6, 2019 at 11:57 am,
      spanky says:

      I should say that I wouldn’t expect a weekly close above $21. It’s certainly possible we could hit $21.50ish but I don’t expect that level to stick whatsoever. That would also paint a nice symmetrical H&S top on the daily and weekly charts. I don’t think that H&S will get triggered, but it is going to make plenty people nervous into July.

  3. On May 6, 2019 at 12:11 pm,
    spanky says:

    The daily stochastics for GDX have been oversold for over 2 weeks. Based on history, we should get a pretty decent bounce coming very soon (probably this week) that will probably convince lots of people to get long. I am not expecting a repeat of July-August last year where GDX stayed over sold for almost 6 weeks before any sort of bounce (it also proceeded to make a lower low after that initial bounce). But I am expecting price to come right back down after getting rejected at the 50 dma.

  4. On May 6, 2019 at 12:30 pm,
    cfs says:

    https://www.silverinstitute.org/silver-supply-demand/

    King world news put out ststistics for gold, but silver true stats are more interesting.

    • On May 6, 2019 at 2:04 pm,
      b says:

      Ya gotta wonder how jp morgan could hoard so much so fast.

      JP Morgan Silver Buying
      2011 to 2018: +152.3 million oz silver bullion

      Doesnt look like enuff “spare” silver around looking at that chart.

      hmmm

  5. On May 6, 2019 at 12:45 pm,
    larry says:

    /ES if it gets back below 2929 by tommorrow the downtrend remains intact for now

  6. On May 6, 2019 at 4:05 pm,
    larry says:

    /ES sneaky…the thing got pushed back below the daily TAS resistance line of 2929 in one 3 minute bar…Wide stops are a must for stayin alive in shorts…twice as tough as long positions…The one hour chart has a small AB=CD down 1:1 target at below 2880 area…Then reasses….On /ES look at those last three daily candles, huge range but all green….Translation is that sellers get it going and then buyers on the dip…Until not…When is NOT?….i not know!…lol

  7. On May 7, 2019 at 7:09 am,
    larry says:

    /ES…look out below?…/ES just hit lower TAS profile support of 2894…wide ranging daily bar with some conviction, volume , behind it……but 2894 must fail as support…..or yet another buy the dip day….!

  8. On May 7, 2019 at 7:20 am,
    larry says:

    /ES…2894 has broken below with price….If we get say 30 minutes below and an attempt to break above that fails this level becomes daily resistance…then the next support to test becomes TAS bottom weekly profile at 2859……Then reases…it may not break and hold on first pop below due to a convergence of some other hidden support

  9. On May 7, 2019 at 7:30 am,
    OOTB Jerry says:
  10. On May 7, 2019 at 7:36 am,
    OOTB Jerry says:

    America long ago lost its independent farmers to debt overload. All it took was a drought, or a dustbowl, or the Fed driving up interest rates on loans, and farmers were foreclosed and the farm properties passed to corporate farming. Today the same thing is happening to dairy producers. Canada’s response to Trump’s tariffs is to place tariffs on US dairy products. The earnings drop leaves American dairy farmers overburdened with debt service. This business, too, seems destined to be concentrated in a few hands. Economic independence is being driven out of American society.

  11. On May 7, 2019 at 7:37 am,
    OOTB Jerry says:

    People are lost balls in high weeds…….people are debt ignorant……PERIOD.

  12. On May 7, 2019 at 7:54 am,
    larry says:

    /Es the vix one day ROC rate of change is large…so expect some sort of bounce unless this profit taking turns into a black swan rout

  13. On May 7, 2019 at 7:57 am,
    OOTB Jerry says:
  14. On May 7, 2019 at 8:09 am,
    larry says:

    /Es looks like intra day rally setting up for a while…the RSI on 1 thru 10 minutesi chart is getting stronger as price declines…i am out of the short for now

  15. On May 7, 2019 at 12:32 pm,
    larry says:

    /Es..sold my spxs due to 1 through 10 minute charts having strong (14) RSI divergences with the lower prices…Big mistake…Those meant nothing due to the strenght of the initiation move down on a daily level….maybe a pop into wednesday for the big IPO on friday

  16. On May 7, 2019 at 12:38 pm,
    larry says:

    we need to see a $tick level of minus 1440 to show some fear with everyone dumping into the weakness at the same time…We are not yet showing that sort of fear….

    minus 865 right here