Monday, September 30, 2019

This Morning's Log Entry: What Explains The Market's Resilience in Q3?

9/30/19 Monday

Despite all of the headwinds, although the S&P remains only marginally higher than it was all the way back to January ’18, the market held up remarkable well in Q3. Hmm....


???

Amid the swirling narratives I believe it’s quite simple; traders are for now choosing to ignore the under-the-surface cracks forming in the market’s fundamental foundation in anticipation of a trade deal with China. Yep, it’s that simple! 

Questions therefore being:

1. Will there be a deal?

2. Will it be substantive?

3. Will it be a buy-the-news event?

4. Will it be a sell-the-news event?

My answers (given all present trends/developments):

1. Yes

2. No

3. Yes, initially

4. Yes, ultimately

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