Good morning. Quick note. I just published the Exodus Strategy Session that normally airs on Sunday. The model is neutral after six consecutive bullish weeks. I think there may be a signal developing when the model goes bullish that many weeks in a row, but for now, that is simply an observation.
Models are calling for volatile chop until we hear earnings out of NVIDIA and Walmart Thursday afternoon. We also have Alibaba Wednesday morning, which is an interesting barometer of China amid all this tariff nonsense talk.
Tariffs are not nonsense it’s just that macroeconomics are not actionable no matter how smart we sound when we talk about them.
Trump tweets are actionable if you are at the turrets when they hit and you trade the reaction.
Regarding last week’s selling. I am of the belife that the selling pressure seen last week has nothing to do with geopolitics. It is more a factor of basic market mechanics. The rich private equity goons of the west coast are unloading billion’s worth of equity supply onto the markets. Participants are doing their best to absorb it, but only so much money is funneled into the equity complex every pay period from W-2 chumps. This is causing imbalance.
Pair that with the CME launching a wildly successful new set of index futures, and you have a nice recipie for volatility.
Ignore the noise. Focus on the auction.
I have to attend to a few non-stock-market-related matters then I will be back to assess the state of the market after the big boys duke it out.
PRO GAP DOWN
Trade’em well.
Raul Santos, May 13th 2o19
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