The model has switched to a CASH/NEUTRAL signal. The market is at greater odds of a deeper correction given the escalating situation between the U.S. and China. The NASDAQ Composite and S&P 500 futures are showing both breaking below their respective 50-day moving averages. Sidelines for now despite QE. CME Fed Futures adjusted over the weekend from one to now two rate cuts by the end of the year.
The ongoing bare knuckle brawl between the U.S. and China on trade matters will continue despite Trump's sometimes sanguine tweets of a hopeful resolution as China attempts to break out of its box against the world's existing super power, the United States. We will publish in the coming days a more extensive report on the situation.
As we saw last December, markets can correct sharply even in this era of QE.
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