Skittish…
That’s the word that best describes the trading last week. From my perspective anyway... Though temperatures suggested otherwise, summer officially started last Friday and the market started to reflect the same with a steady decline from the volumes we saw over the spring. While volatility for the week overall was a bit muted (the ES range was 47.25), the intraday trading was both narrow-ranged… and frenetic… though not at the same time. That said, the stock indices managed to end within shouting distance of the all time highs achieved last week. In fact, the S&P 500 experienced its best June since 1955 up 7.19%... and the best first half since 1997 at +17.4%.
The overarching theme this week continued to be the trade relationship between the US and China. Stocks repeatedly reacted to any news related to a Trump/Xi meeting at the G20. Stocks bounced on the mere suggestion that the 2 sides were showing flexibility. Even with key economic releases leaning bearish during the week (weak manufacturing and consumer confidence), the positive higher timeframe structures conspired with the end of the week, month, quarter and first half to drive stock prices across the board higher by week’s end.
Interestingly, Goldman Sachs delivered a list of US stocks with the highest China exposure. Click here for the list of names, where they closed on Friday and their % revenue exposure to China.
Though I’m sure GS shared this list with clients well before Friday and many are already positioned in a way that reflects their beliefs about the likely outcome of this weekend’s meetings, there are likely still several trades to be had here. If you’re interested, go through the charts… and apply your process to determine which (if any) are best suited for your trading style.
Meanwhile, back on the ranch…
Here are a couple of charts for your consideration…
DJIA [DIA] Weekly -- Nothing is ever guaranteed, but there's no doubt price looks ready to launch higher.
SPX [SPY] Weekly -- Not surprisingly the SPY and DIA look very similar. SPY is a bit more ragged in my view, but the overall context looks to be higher.
I’ll go a bit wider and deeper on a Facebook Live for group members tomorrow morning US EST (no, I don't yet know exactly what time thank you kindly... likely around 8AM. Click here to join my email list if you’d like to receive the notice a bit before I go live I’ll take a look at the small and midcap indices, Gold, Bitcoin, the FAANG components, and some of the broad measures that help determine my overall view of the market. I'll even take a few "requests" if anyone shows up and would like me to look at a particular name.
I hope you’ll join me tomorrow morning, but in the event you can't, have a GREAT week and start to the 2nd half of 2019.