“I will not allow yesterday’s success to lull me into today’s complacency, for this is the greatest foundation for failure.” – Og Mandino
It’s going to be very interesting to see how we trade into the weekend. As you will likely see on the media today; the narrative will be shifting from ‘this market never goes down’ to ‘how could the market have ignored all these risks’…
As we said yesterday:
We cannot put enough stress on the fact that there is more and more risk building up out of Washington. Apart from the Muller investigation, Stormy Daniels and Iran (who would have thought that these 3 would be in the same sentence), do not underestimate the tensions and action/reaction from the China tariff announcement. Once again, the market is being very complacent.
Our base case remains that Facebook is broken and if you look at some of the other names like Apple, the turn is trying to get traction… this is the most important development in the markets.
Naturally, everything is not lining up perfectly and there are still some stocks and asset classes that are not cooperating/not in sync but the potential for all the ducks to line up is definitely increasing.
In terms of intraday action, we always prefer to look at each chart independently and let price guide us but there are times when we need to put a little bit more weight behind the bigger picture/underlying currents.
The theme for the day is how flows react into the end of the week. All things being equal, one would expect markets to continue to trade heavy and to see selling coming in on any rally attempts. Naturally, miracles do happen but as we stand now and as we have repeated highlighted, it seems that something has broken…
As always, there is no substitute for real-time/live action; if you are interested in attending a daily morning call into NY with a more detailed live discussion on all the charts and ideas we highlight/review in the outlook video and here on the blog, you should check out our Daily Webinar Group.