A Knee-Jerk Reaction - Market Update from QuanTimer for June 26, 2019

A Little Dose of Reality for the Market
In the short run the market always makes an extreme move. A huge rally off the lows at the beginning of the month was a perfect backdrop for a pullback yesterday. With persistent trade tension and the recession talk abounding it does not take much to shake out some weak hands.

Fed Chair Jerome Powell said that the Fed is assessing whether the US economy is weak enough to call for lower rates. The Fed will likely take a wait-and-see approach. Earlier on Tuesday, James Bullard downplayed the prospect of a 50 bp cut. Both of these statements put the kibosh on market euphoria. After all, the 50 bp rate cut in June is not a done deal.

Reading Too Much into Day-to-Day Movement Rings the False Alarm
At QuanTimer we focus on the large persistent moves rather than very short-term gyration. Remember, the market is always moving under the influence of multiple factors. The sum total of all these factors show up on the large moves. With the tension so high on the trade front, weakening manufacturing data in the US, warnings of global slowdown, and yield curve inversion it is easy to feel the jitters and sell the long positions at the wrong time.

To be successful in trading you MUST have a system, and you MUST follow the system consistently.

QuanTimer market stance is bullish at present. Please review our market outlook in an earlier post here -

Happy trading.

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