There are two groups of buyers in the stock market – computer robots and humans. There are no dogs or cats that buy stocks or do trades only robots and humans.
It was obvious going into the close yesterday that tariffs were going to hit as the trade news of the week made it crystal clear, but computer robots bought on a simple technical signal.
The S&P 500 went below its 50-day moving average support level and had a bounce back above it.
That’s the first support level for the S&P 500 and we’ve been talking about it a lot this week and it brought the robots in.
That buying brought human buyers into the market who also saw a Trump tweet in which Trump said he got a “beautiful letter” from Xi.
There is a possibility – a slim one – that somehow the Trump administration and China can come to an agreement over the weekend over trade before these new tariffs hit in full force.
Some people yesterday decided to bet on this miracle and that is why the stock market is not dumping down big time on these new tariffs.
If China retaliates though I suspect that will cause another dip into the market down to the next support level and cause a spike in the VIX in a bought of market volatility.
That wouldn’t be the end of the world.
My book Strategic Stock Trading can help you do this. This book lays out the simple methods and key indicators I use to keep on top of the trends of the market and to identify the best stocks to buy.
If you take advantage of my special book giveaway offer you’ll also get into my private trading group and receive my coming buy alerts to take advantage of this Fed front running trend.
To grab it go here:
http://wallstreetwindow.com/strategic-stock-trading-book-offer
-Mike
