S&P Breaks Out In Asia, Pulls Back In Europe – Stock Market Trading Setup

Quiet morning here in Yurrop. S&P futures are up a mere dozen points, coming down from up 25. Nasdaq futures are only up 30 some, off highs of up 60 some.

Today’s media raison du jour? China cuts tariffs on US goods thanks to Cornohaha Virus. See, it’s all good. Death? Bullish. Pandemic? Bullish. Central bank money pumping (wink wink shhhhh…), definitely bullish.

Liquidity moves markets!

Over on the Shag High in China, the spike off the trend support low continues. The gap breakdown is now 2/3 filled. But 2866 is a resistance area. Normally, we’d expect a pullback to test the low before a sustained rally from here. If I had to guess, I’d say first they’ll push it toward the busted uptrend line at 2925. Then we’ll see.

(Click on image to enlarge)

Notice that I said “normally.” But there’s no such thing as normal any more. Only Chairman Mao knows how much money the “People’s” Bank of China can pump into the market to keep it at least semi flatbed. [New word ©Wall Street Examiner. Do you like? If yes, send donation. Cash only. Small bills.] Meanwhile, over on the US side of the world, the Fed is pumping $100 billion a month into the market and it isn’t even breathing hard. 


Now to redundantly re-emphasize, “The important thing from the perspective of those trading the US, if China doesn’t break, then Wall Street can keep partying on.”

Meanwhile, back on Wall Street, having traded higher yesterday on the Cornohaha Virus cure, the S&P futures (ES) are again higher as of 5:00 AM in Noo Yawk. But second thoughts began to creep in as European institutional traders finished their morning coffee, before their mid morning coffee break. Not to mention their lunch break, and afternoon tea. Then drinks at 5, and back to work from 7 till 8, then head out for dinner.

This is why I love spending so much time over here. They got their priorities straight. Eat, drink, recreate, and procreate. Oh yeah, squeeze in a little work here and there.

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