In my earlier blog post I said:
“While setting a date for September talks would no doubt be good for a couple-hundred+ Dow points, the chasm separating the two sides is wider today than it’s been throughout the entire process.”
Well, talks in Washington were just confirmed a few minutes ago, and I got one thing wrong, they’ll take place in “early October”, as opposed to September.
As for the market reaction, take a look at this one-minute chart of the S&P future contract:
Percentage-wise that’s good for 209 Dow points.
I should’ve known it’d be “early October”, as, I also said earlier:
“China absolutely does not want to see huge foreign capital flight, at any time, let alone leading into the National People’s Congress 10-day extravaganza. The latter I suspect also inspired the overnight easing of bank reserve ratios; the Chinese government is notorious for temporary water-calming measures leading into such events.”
The Nat’l People’s Congress is scheduled for 10/1 to 10/10. China absolutely can’t have markets roiled in the event of unproductive talks ahead of that meeting; which, if they were held today, would be a virtual given based on the latest entrenching on both sides.
As I’ve been illustrating in the videos, click here for today’s brief one if you didn’t catch it earlier (at the 6:30 mark I discuss short positioning), there virtually has to be a pretty decent raft of shorts right above where the S&P closed today. If this rally holds into the morning, look for an exaggerated upside move when those shorts cover.