US Wednesday Pre-Market Stuff
Traders, the fix seems to be in for this week. Trading desks are lightly staffed and everyone is in holiday mode. The dumb question I asked was: how much can they toy with that phase one deal stuff? We got an obvious answer: much, much more.
SPX closed up +0.22% at 3140.50 and Tuesday's ES profile is more classically shaped with excess on both ends, a volume point of control at 3136 and time poc around 3137.25. The RTH close was 3144 at the top of the excess and the overnight session looks to be positioned about 70% long with a bit more than three hours until our Wednesday cash open. SPX mid-week support is heaviest at 3100 now. Also for mid-week, 3140 is a point of contention and resistance for the cash session is 3150. The largest weekly resistance point is SPX 3160.
NYSE internals had a weaker posture on Tuesday and NYSE cumulative intraday tick trended down after lunch. NYSE A-D lines were just above zero and finished at +237. NYSE breadth was slightly negative for some of the session and left off at 1.22:1 while NASD breadth finished at 1.07:1.
Interestingly, US Treasuries were positive despite this rally. Yields were down on Tuesday with 2-year losing -3 bps to yield about 1.58% and the 10-year down -2 bps and yielding 1.74%. The big bond was also down -3 bps to 2.18%. At present they are pretty near yesterday's cash market levels.
The financial press is detailing plans for a mutually beneficial agreement where our consumer driven economies would remain unscathed into year-end and China retains their composure and reposition for next year's hangover. After Sunday’s news drop about Chinese measures to crack down on IP theft, the major ES driver is Tuesday's sanguine phone call between trade negotiators. Sticking points have been outlined and include questions over the removal of existing tariffs on Chinese goods and China's commitment to agriculture purchases. The new bipartisan bill in support of Hong Kong's pro-democracy movement is in play and the 156B in proposed tariffs on Chinese imports set for 15 Dec is a focal point. But no one wants to let the details derail the larger mission and both sides have their good cops on point for the sake of the stock market and, in our case, the 2020 elections. Toothy grins on the US side are there to offset impeachment situation where national polls indicate that around half the country are down with the process. As you probably know, female voters are reported to far outnumber the men in this quest for impeachment followed by removal. The idea that removal is unlikely will not keep this gender disparity from playing heavily on the minds of the US administration. Hope you have a good evening and a good trading day ahead.
