In this morning’s video commentary I pointed to the high likelihood that 2630 on the S&P 500 would be tested (on the way down) this week. Well, that was quick, as I type the index trades at 2626.
Here’s why:
“US cancels trade planning meeting with China”
So, I suspect there’s strategy implied within that headline, but I have to tell you, the incredibly mixed messaging coming from our side of the trade table is doing a real number on global market sentiment. Case in point, this morning Mike Pompeo via video to the crowd in Davos implied that negotiations are going well, and that he’s confident that a trade deal would happen. Of course his comments fly directly in the face of the cancellation of next week’s meetings by the U.S. due to lack of progress!
Personally, I think the time has passed for such maneuvering, as businesses are clearly feeling the pain from the trade uncertainty.
All that said, as I illustrated in this morning’s video, today’s headline or not, a test of lower support levels was/is very much in the cards.