Remember the Oval Office celebration for the Phase One “deal” on Oct 11? [see: Good…Easy to Win.]  Apparently being impeached turns up the heat a bit, because Trump now insists we’re really, really close to the deal that was ostensibly reached two months (and 240 SPX points) ago.  Unfortunately, it takes two to tango. From this morning’s WSJ:

BEIJING—China indicated that a near-term trade agreement with the U.S. has yet to be completed despite President Trump’s signoff, highlighting the unpredictability of a negotiation process that has rattled global markets and businesses.

Trump on Thursday approved a so-called phase-one trade pact that will scale back existing tariffs on Chinese imports and eliminate new levies scheduled to take effect on Sunday, in exchange for a written pledge from Beijing to buy tens of billions of dollars worth of U.S. farm products, among other concessions.

While Mr. Trump was “upbeat and enthusiastic about this breakthrough,” in the words of Michael Pillsbury, an adviser to the president during the trade talks, the mood in Beijing has been decidedly more sober.

Algos, ardent believers in the President’s truthfulness, have sent futures 40 points higher on the “news” – aided by a Fed which is throwing $500 billion in not-QE at the markets.

There are still a few of us carbon-based chartists who, having seen this game played eleventy billion times before, are a bit more skeptical.

continued for members…

The pop has primarily been aided by VIX taking a dive……and USDJPY and CL pushing higher.

For its part, RB is higher but still backtesting the broken white channel. This leaves SPX “broken out” again – an uncomfortable place to be for bears — even though the last breakout failed, initially shedding 84 points.

As we’ve discussed, everything remains in place to “save” the market as often as necessary — as long as there isn’t a full-on panic. The line in the sand remains ES’ SMA10 now at 3134 (it turned up again after starting to roll over yesterday.)

This remains a dangerous market to short – especially with the weekend upon us.  I see that China just issued a statement that they will hold a press conference “sometime on Friday.”

I’ll be on the road until about 1pm this afternoon, will catch up on things at that time.  GLTA.