E Market Briefing For Wednesday, June 12

A 'moat' is seemingly needed given the range of S&P possibilities that most pundits are now debating; depending on everything from 'technology' investigations (and potential antitrust actions); political noise (some of which is self-inflicted by the politicians); and of course the primary focus; which is whether or not a 'China Trade Deal' moves forward (with a focus on whether President Xi shows up at Osaka, some say; although doing so doesn't imply Chinese acquiescence to all terms of the nearly-completed former 'deal').   

With the S&P back up to (and rolling on either side) of 2900; definitely heard are extreme views, ranging to 'moonshots in technology if a deals' made' (I actually think that would be brief and sold-into on a trading basis at least); to collapse and crashes of the market if President Xi fails to show and we don't at least get an outline of a 'path forward' between the U.S. and China (well I've said if there's 'no deal' the market would tank; but it a process, which included a forecast June bump-up, that we've now seen). 

 

For a trader, the response 'might' be to 'hedge' both directions or protection such as in options (especially if that trader is heavily involved in expensive technology stocks which would have significant risk if the plug is pulled). Of course for most (including big tech stocks) the investors who are in far-lower from a good while back (no later than the December forecast trading bottom for the S&P and a lot of other areas at least temporarily), either do that for a bit of insurance; or they lighten to the sleeping point (which varies of course) or they just wait and should there 'be' a deal, and a moonshot; only then try considering taking more money 'off the table' into likely unsustainable gains.  

However, the elements of the rally at 'this' point won't reveal the outcome; a reference to why 'moat building' (or mental preparation) may be reasonable. I believed investors/traders got too pessimistic after May's expected decline, and that the market now is running into certain resistance ceilings; but they can be overcome 'if' there is a satisfactory outcome from G20.  

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