Wednesday June 27, 2018
Monday was probably what Richard Russell would call a 90% down day. This occurs when 90% of stocks close lower, if it was not 90% for the DJIA, it was a high percent for sure. Russell would also note that such days were usually followed by a couple of languid, weak attempts to regain ground.Tuesday certainly qualified in that regard. And in pre open Wednesday not much is happening as well.
Five waves up can be counted from the low.And the BP indicator stopped, and reversed and fell below the trend line at the 61.8% retracemetn level, almost on the exact number.
Here is a closer look.
At this juncture such an indicator will often try to re bound above the trend line, and fail.This really bears watching as the trend line has held since the April low.
Historians may record that this was the week the world went from trade talks to an all out trade war. Trump is calling out Harley Davidson. HD has no choice but to move operations to a country where there is no export tariff to Asia. Apparently Trump, as noted on Mornings with Maria by all three female analysts, does not understand the global supply chain. The WSJ notes that a US nail maker is under siege due to higher product costs of steel. And there are 20,000 requests for exemptions. Already Texas pipe producers are beginning to wonder what will happen as they are forced to buy more expensive steel. There are way more steel consumers in America than steel producers. Trump is helping a 1955 by gone industry which is now far more mechanized, ie, steel.
Merkel is in trouble in Germany. Now that 1.5 million immigrants are there, the Germans are not happy.
The US Dollar is stronger and the yuan hits a new low. We noted the new low in the Shanghai Index this weekend. Negative social mood is rolling markets world wide.
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