Quick Tuesday Update


Today's "impressive" market rally is entirely based on these two expectations:

(1) A dovish Fed statement out tomorrow afternoon signaling lower interest rates, and,

(2) The increasing likelihood of trade agreement between the US and China.

How can this end well? The bullish news is now priced in, opening the door for a "buy the rumor, sell the news" event. On the other hand the Fed could disappoint tomorrow, and/or worse yet, we are getting played by a shrewd adversary, lifting expectations for a trade deal and then pulling back at the last minute in an attempt get an even better deal. 

What happens then? "Then," is the first week of July which was supposed to be one of those throw away weeks with a major market holiday in the middle of it, perfect for taking a few days off. Really? 

Once again I will be taking Blue Line Trading with me on vacation (July 1-5).