Bloomberg: “U.S. stocks slid as investors grew anxious that the Trump administration won’t reach a trade deal with China before a March deadline for escalating the war. Treasuries surged.
The post-Christmas rally that added 16 percent to the S&P 500 came under increasing pressure amid reports the two trading partners remained far apart on a deal and that the nations’ presidents won’t meet before higher tariffs are slated to take effect on Chinese goods next month.”
S&P 500 volatility remains high. If the rally runs out of steam, a large Twiggs Volatility (21-day) trough above 1.0% would signal a bear market. Retreat below 2600 would reinforce the signal.
Crude prices retreated below resistance at $54/$55 per barrel, on fears of falling global (mainly Chinese) demand. Another test of primary support at $42/barrel is likely.
10-Year Treasury yields retreated to 2.65%. A Trend Index peak below zero warns of buying pressure from investors (yields fall when prices rise) who are looking for safety.
My conclusion is the same as last week. This is a bear market. Recovery hinges on an unlikely resolution of the US-China ‘trade dispute’.
The secret of happiness is freedom and the secret of freedom is courage.
~ Thucydides (460 – 400 B.C.)