Market Observation (18/8/2017) : Trumponomic is Fading


Candle analysisEven though recent economic data and reports were showing US economy is improving, however there were sign of weaknesses investors were showing in the S&P 500 Futures (/ES) chart.  Candles in recent trading days before the first fall due to US-Korea wars threat, were showing some signs of retreat that we should have taken noticed.

  1. There were 5 doji (while circles) candles before the fall last night, 4 doji before the fall of war threat.
  2. Among all the doji, the wristing between the bull and bear were obviously won by the bear as each of the candle closing were lowering one after another.
  3. Even though the bull was strong enough to shoot up until created a record of all time height at 2448.5 on August 7th but it was quickly denied and erased by the bear (yellow circle). It shows how strong the strength of the bear fighting such a fierce and merciless battle.
  4. Lastly, the trend is getting down (white arrow lines), there were lower low’s and lower height’s as evidence of investors faith on Trump delivery of his economic promises is fading. (See also my previous article about “the last straw on back of Trump’s camel” on Economic Market Watch Update: 1/5/2017 )
  5. Hereby, if President Trump is not able to turn around his current adversaries any time sooner, we would expect the down trend going to continue until all of his aspirations evaporated and leaving behind are only those economic stimulus credits created by previous QE’s.ES Chart Support Analysis
  6. It should not be surprising if ES retraces to the nearest support on 2440 (white line) or even lower support at 2360 (pink line) and the worst scenario at 2330 (yellow line) support. But I hope this will not happen. On the other hand, we should hope for the better and prepare for the worst. Shall it happens, we should be glad to take advantage, because “every crisis would be good opportunity” as the Chinese motto says it rightly.

 

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