Weekend Update: The Big Picture


A respite from system trading this weekend and a return to the the bigger picture and the forces underlying the daily price movements. The first five months of 2019 carried the market up in a robust rally from the December lows. May was either a speed bump or the beginning of the traditional summer slump. We should have a pretty good idea by the end of this month as two upcoming financial events will affect the rest of the summer and maybe the rest of the year. The article link below sets out in graphic detail the range of outcomes from the two key events: The FOMC meeting mid-week and the G-20 summit June 28-29:

The S&P Could Drop 250 Points Next Week If Two Things Happen

First up is next week's FOMC meeting where they either cut, or promise to cut, or it will the be market that cuts and runs. If they do as expected (confirm rate cuts if not now, by the end of the year), probably nothing happens, or maybe a few days of a rally, 

The following week is the G-20 summits in Osaka Japan and that has the makings of being the biggie. Either the U.S. makes a trade deal with China (very bullish) or they don't (very bearish). Worst case, Xi Jinping, President of China, doesn't even show up. Timber. 

This is a weekly chart of the Nasdaq 100 that suggested a top of some kind in early May, followed by a new trend lower, followed by a counter-trend rally into last week. The news of the next two weeks, coupled with the look of this chart, may set the market's path for the rest of the summer. Note that the index closed near its lows of the week. Stay tuned. 


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