The one-two punch of hope for a trade deal with China and blow-out Jobs data caused a huge gap-up and push Friday morning.  However, after 12 pm the grind was on and we treaded water the rest of the day.  The SPY ended up 0.91%, the DIA up 1.20% and QQQ up 1.07%.  This placed us below, but close to all-time highs again.  At the same time, T2122 has risen into the over-bought area at 91.28.  The bulls clearly have taken control once again.

Related to the Trade War with China, Bloomberg reported Sunday that “sources” on the Chinese side expect a deal prior to the Dec. 15 deadline…thus forestalling new tariffs.  They expect this deal to include a significant rollback of existing tariffs.  On the US side, Larry Kudlow said again this weekend that a phase one deal is very close (as it has been since it was “done” two months ago).  His main point was that if a deal is done it will President Trump’s decision.  (After all, it’s not a deal or its terms that matter. The important thing is who gets credit.)  

Potentially complicating a deal is continued unrest in Hong Kong.  The largest demonstration in six months took place Sunday.  Police estimate 200,000 protestors while organizers put the number closer to 1 million.  In either case, it was a “relatively peaceful” demonstration with only sporadic petrol bombs thrown and the only arrests coming prior to the event as a couple dozen organizers were snatched up shortly before the protest.

Monday has no major economic news or earnings reports.  However, this may be a roller-coaster week with another Fed meeting (no moves expected), the election in the UK, an ECB rate decision, and more twists in the trade deal saga likely prior to Sunday’s tariff increase deadline.

Overnight, Asian markets were mixed, but mostly in the green.  In Europe, the major markets are also mixed, but mostly red at this point.  As of 7:30 am, U.S. futures are all pointing to an open slightly on the downside of flat from Friday’s close.

With no expected news or earnings today and some major events planned for later in the week (or weekend), today may be a rest day.  On the other hand, the bulls can smell those all-time highs again and nothing has changed since Friday’s dramatic run.  So, they will be wont to follow through.  Either way, we need to trade the chart we get.  Continue to take profits, move stops, plan your trades, and trade your plans.

Ed

Swing Trade Ideas for your watchlist and consideration. CC, HP, DVN, EOG, CXO, CPRI, DXC, FMC, KO. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.

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