Another day, another after-hours ramp on trade deal rumours…

This time, the news is out of China.  Last night’s news, however, was more convoluted than usual.

China says that it has agreed with the US to remove tariffs in phases.  But, it also said that the deal would require that both countries simultaneously cancel tariffs on each other’s goods in order to reach a “phase one” deal.

The China spokesman said the proportion of tariffs canceled for both sides must be the same, but the number to be canceled can be negotiated. “In the past two weeks, the lead negotiators from both sides have had serious and constructive discussions on resolving various core concerns appropriately. Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations.”

Maybe it’s just me, but that does not sound like a deal is in place – phase one or otherwise.  In fact, it sounds exactly like the type of news blurb which would have been released months ago: “We’re working on it.”

But, please, don’t bother the machines with the deets.  ES made new highs……while VIX has collapsed again (to its previous lows of course)…  …USDJPY has popped up past its SMA200 again……and, CL has topped its SMA200 again. These are repeats of moves that have all previously failed. But, hey, we have new highs in the S&P500!  So, what’s not to love?

continued for members…If futures can maintain their current levels for another hour, SPX could make new highs too.  It closed 8.42 below its recent highs yesterday.  If not, the top is in and we can think about some of these downside targets.Note that its SMA10 closed up above its 2.618, so it’s “safe” to backtest both at this point.

At 3092.50, ES’ Fib patterns align with logical downside targets.  But, of course we’d need to see a breakdown first.

Notably, ES’ purple .618 is right on top of the SMA200 at 2896.75.

And, unless we get a reversal today, ES’ RSI will have broken out of a chart dating back to Jan 2018.

The bigger picture for CL shows it completely ignoring this week’s quite bearish inventory data.  So, no expectations of an actual breakout.And, though RB has not broken down, it is back below its SMA10.Although USDJPY is back above its SMA200 again, it is the 4th lower high in a row since Oct 13. If it does top the Oct 14 highs of 109.297, it still faces the .618 at 109.358 which it has already whiffed several times. VIX’s TL of support remains intact.Even AAPL’s overnight price action looks tenuous.The TNX daily chart is finally showing a potential breakout that would align with ZN’s price action.  We’ll see if it holds.The 2Y is still threatening to break out, but hasn’t.And, gold continues to hold its .500 as well as a TL of support on its daily RSI. If this all seems clear as mud, join the club.  From a purely technical standpoint, anything above SPX 3047.34 and ES 3076.93 is a breakout and warrants a long position.  But, the factors are clearly holding back as if, as we discussed yesterday, something ugly is in the works. Could it be Deutsche?  Sure.  But, there are a million other things that could unravel the markets.

The remaining economic data for this week doesn’t look very threatening. The ones to watch today is consumer credit.  If it tumbles, this might get algos’ attention.

Clarida and Quarles speak today and Brainard speaks tomorrow.

Next week, the stakes are much higher. Though we already have a very accommodative Fed through at least the next FOMC meeting Dec 10-11.  Minutes come out on Nov 20.For now, the biggest threat would appear to be that the White House pops last night’s Chinese trial balloon.

As mentioned yesterday, I’ll be out of the office today.  I might get a chance to post later, but  it’s not likely.

GLTA.