Month-end rebalancing, a short-term bullish chart pattern and a short-term bullish RSI divergence have odds favoring a bounce in equities right here.
A lack of response (yet) out of the Administration to China’s retaliatory rhetoric this week should bolster a short-term rally. One tweet however and traders are poised to move the market notably in either direction.
This morning’s strong 2nd estimate of Q1 GDP and continued low jobless claims should momentarily allay some of the worries over a weakening economy.
As I type the Dow’s up 80 pts, SPX and Nasdaq are each up .5%. A fade of this morning’s tepid rally would not bode well for the near-term outlook, although a tweet could change (or exacerbate) things in a hurry.
Beyond tweets, there’ll need to be some real progress by way of a tariff-removing trade deal, and, frankly, a different strategic approach altogether to international trade relations going forward to see equities sustainably above this year’s highs.