Testy trade poker  is now bending a bit to suggest Europe as honorable contrasted to the U.S. only because of President Trump's rather heavy response to the EU's proposal for 'tariff elimination' on all automobiles as well as industrial products. His redaction of cooperation is the antithesis of his own proposal for 100% tariff elimination.

A discussion today with Tesla staff here in Germany, affirms hopes for solid 'Model 3' sales; especially if Trump re-embraces the idea of a 100% industrial product tariff avoidance. 

Trump's tweet on trade contrasted the EU with China, but smaller. This is ridiculous; since currency and wage parities are closer among both. It's hopefully a negotiating ploy; but the market didn't like it and I realize why. It is slightly different with Canada and we don't seriously accept Trump very pointedly saying we might not have Canada in a revised NATO. A spread in currencies, not low undermining wages, is the underpinning challenge. 

At the same time the market is sorely due to correct from a prolonged and uninspiring 'grind' higher along the standard deviation envelop highs, and I believe any drop now, while valid, will be contested next week after Labor Day, because they'll view any selling as mere pre-holiday squaring, not as a correction. So again it will be a process if it proceeds, not an event.  

Ultimately we should get a more aggressive high visible correction that of course takes out some of the high level technical supports, just not quite at this point. Guys like Warren Buffett are basically talking the market up or at least trying to psychologically preempt selling, by suggesting that stocks of course do better than bonds 'for the long term'. This is true but inferring it at an extended level like we've visited is more a form of hand-holding or of cheer-leading for stocks in general, than it is analysis of where we are.

Daily action  

Friday was down but recovered somewhat after Thursday's mild shakeout. We mostly had a down-bounce-down-bounce-dip sort of pattern, generally in-line with expectations. The Argentine crisis joined a couple other concerns.

The President's rejoinder to the EU acceptance of a tariff-free environment for 'all' industrial products was roundly rejected, which is not a plus given a posture taken by Trump himself, who originally made that very proposal.  

A concentration of active interest in a narrow handful of FANG's (or similar tech stocks) dominated the market as you know; and now is 'at risk' of having some oxygen sucked out of the marathon, quite soon. In fact a SalesForce.com shortfall announced after Wednesday's close may hint at analysts having raised earnings expectations about realistic goals in efforts to justify not only valuation concerns (that so many think irrelevant, at least this Summer); but in-order to keep the upside game going.  

However, in the short-run, the progress (rather than lack of) toward a 'deal' with Canada, perhaps by the self-imposed Friday deadline, not only earlier helped the upside, but may largely already be priced into share prices. 

Tuesday may start rocky but then try rebounding in a short trading week. I would not presume this market moving much higher; in a convolution if not entire tense time.