The coming week (June 25-29) should continue the minimally reversing, trending markets moves, but with the addition of rowdy bullhorns in several symbols. The only potential mathematic exceptions are crude oil, soybeans and bitcoin.
Global equity benchmarks are ripping back this morning as trade tensions have found a way into the back seat of investors’ minds. In fact, the small-cap and domestically focused Russell 2000 notched a record high on Monday, matched it yesterday and extended such gains in today’s session.
Risk-off sentiment is sweeping through global markets after U.S. President Trump fired back at China last night. He instructed the U.S trade representative to identify $200 billion worth of Chinese goods to impose a 10% tariff. Crude oil recovered very well yesterday as speculation mounted that OPEC will only raise production 300,000 to 600,000 bpd. However, this morning, crude oil is a casualty of the risk-off, trade war fears.
On Friday, the White House announced 25% tariffs on $50 billion worth of Chinese goods. As promised, China quickly retaliated imposing 25% tariffs on $50 billion worth of U.S goods. They plan to introduce these tariffs in two phases.
The coming week (June 18-22) should continue the trend of trending symbols. The only potential exceptions are gold and soybeans whose weekly pivots are sideways for reversal scalpers and who already made a wide-range move likely to consolidate sideways. However, both gold and beans have trending monthly pivots--a wild card working against my Iron Condor favorite trade.