The ‘Trade War’ is Over Before it Started

The ‘Trade War’ is Over Before it Started

The ‘Trade War’ is Over Before it Started

$DIA, $SPY, $QQQ, $VXX

The Trump Trade policies look to me like they are working, so…

If the trade war is over before it even began, then the US stock market should be set up for another a sigh of relief and a new rally that will take prices to higher record highs.

The S&P 500 peaked at a record 2872.87 on 26 January, it corrected 10.2% to a low of 2581.00 on 8 February. It then bounced and fell to retest the year’s low to 2581.88 on 2 April. It was back up to 2642.19 Wednesday.

Shayne and I do not believe that the Mueller drama will have any market effect, as President Trump is not afraid of Mr. Mueller and his gang of partisan coppers, the fact is the Mr. Muller et al are afraid of President Trump.

That leaved us focusing on the markets fundamentals and technicals

The Q1 Y 2018 earnings season has just started, Friday, 13 April it starts in earnest.

Industry analysts are expecting S&P 500 earnings to be up 17.0% Y-Y and do not be surprised if earnings growth is closer to 20.0%, a super happening at this stage of the economic expansion.

The Big Q: Why?

The Big A: Well, because we have never seen the corporate tax rate slashed as radically as it has been as a result of the Tax Cut and Jobs Act passed on 22 December 2017.

That translates to forward revenues for the S&P 500/400/600 continue rising into record-high territory. Forward earnings for the 3 indexes all rose to fresh record highs during the 1st week of April And with forward earnings moving to record highs, a rebound in forward P/E ratios to January’s highs should mean new highs for the stock indexes, barring a real war that would temporarily halt a stock market rally.

Wednesday, the major US stock market indexes finished: DJIA -218.55 at 24189.45, NAS Comp -25.27 at 7069.03, S&P 500 -14.68 at 2642.19

Volume: Trade on the NYSE came in at 728-M/shares exchanged

  • NAS Comp +2.4% YTD
  • Russell 2000 +0.7% YTD
  • S&P 500 -1.2% YTD
  • DJIA -2.1% YTD

HeffX-LTN’s Market Indexes Technical Analysis

Date Symbol Price Technical Analysis Support Resistance
11 April 2018 QQQ 160.32 Bearish (-0.25) 158.30 161.55
11 April 2018 DIA 243.09 Bearish (-0.27) 242.84 245.94
11 April 2018 SPY 263.88 Bearish (-0.30) 263.42 266.06

Stay tuned

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