Markets gapped strongly and the bulls ran hard most of the day Friday on the hope of a US-China Trade Deal.  However, at day end, markets crashed back down to Open levels when it became clear there was no deal (not even a partial deal), just handshake and political spin.  (Nothing was put on paper and none of the major points were even discussed.)

So, what we really got Friday was an agreement to talk more and not escalate the trade war until we do talk again.  While President Trump is claiming success (and that China is starting to buy US Ag products, which was true before the meeting began), the Chinese statements say nothing of any deal, just that some progress was begun).

The post-announcement market crash left US indices looking a lot like Shooting Star candles at the top of the recent pull-up.  However, the good news is that the indices did break the recent downtrends.  Monday’s economic calendar is empty and Earnings Season does not kick off until Tuesday.

Overnight, Japan was closed, China was green and European markets are all in the red two-thirds of a percent.  As of 7:30 am, U.S. futures were all pointing to 3/10^th of a percent gap down (apparently either following Europe lower or continuing the “No Deal Crash” late Friday).

The bottom line remains that it is very hard to swing trade in the recent markets successfully.  Until we start getting fewer “gaps and whiplash” and more “trend and follow-through” be very cautious.  Day or Position trading look much more attractive in this sort of volatile and choppy market.  So lock in profit whenever you can. Do not confuse one candle as trading wisdom…or a new trend.

Ed

For Your Consideration: Trade ideas for your swing trading watchlist. Short – CME, MO, RDUS, LDOS, SBUX, SMPL, SHAK, HEI Long – HCP, ES, EQR, AMH, MPC, SYY, AIV, LEN, GRMN Trade smart, and trade your trade. Stocks we mention and talk about are not recommendations to buy or sell.

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