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• • • The Dow - China - Trade
By: MARTY ARMSTRONG | May 13, 2019

Stocks fell sharply on Monday after China decided to raise tariffs on some U.S. goods as the ongoing trade war between the world’s largest economies intensifies. We can see that our Energy Model peaked the week of March 18th so whenever we see such a divergence of higher prices with declining Energy, that is a warning that the rally is unsustainable. The stochastic has not yet turned negative showing that this is not a major correction at this point in time.

Cyclically, we may see a temporary low this week as soon as tomorrow. The main support lies at the Weekly level which comes into play at 25370 to 25200. Only a weekly closing below this zone would signal a more pronounced decline down to the 23750 zone.

Keep in mind that the emphasis on trade disputes is really just the excuse. The market was poised to decline here from a high and that is what we are looking at. The fundamental attached is whatever they can use to explain the move. 

We have the May 23rd European elections coming into play as well.

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