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"China-Trade" Party Continues

01-18-2019

The SPOOs were quite strong overnight, gaining 0.75%, and the early going saw the market pretty firm, although it quickly backed off from its best levels. What was interesting was that, beneath the surface, bad news actually mattered, even though in the aggregate it did not.

American Express, Netflix, and Tesla all lost at beat-the-number, although Tesla's news was a preannouncement rather than an actual earnings report. Nonetheless, they were all negatively impacted by negative news, which is a sign that sanity is still lurking out there and will remain, given that QT continues to be underway.

Not QT Ready A lot of people seem to have totally forgotten about that fact, and the bulls have done a nice job of marching the market back up. I don't think it can get too far, but I don't really know what to expect. I'm mostly just trying to be alert to clues that the rally has exhausted itself, but thus far I haven't seen anything convincing.

In the afternoon, the bulls were inspired, but more "China trade deal" headlines pushed the Nasdaq to a gain of almost 1.5% before the market backed off a little, closing with a gain of a little more than 1%. Away from stocks, green paper was stronger, oil gained 3%, fixed income was lower, and the metals lost ground, with silver falling 1.3% and gold 1%.

Positions in stocks mentioned: short TSLA.