{"id":147575,"date":"2019-05-13T08:30:06","date_gmt":"2019-05-13T12:30:06","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=147575"},"modified":"2019-05-13T06:43:07","modified_gmt":"2019-05-13T10:43:07","slug":"how-chinese-trade-issues-will-drive-market-trends","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/05\/how-chinese-trade-issues-will-drive-market-trends\/","title":{"rendered":"How Chinese Trade Issues Will Drive Market Trends"},"content":{"rendered":"
May 13, 2019<\/div>
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By TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

It is becoming evident that the US\/Chinese trade issues are going to become a point of contention for the markets going forward.\u00a0 We\u2019ve been review as much news as possible in an attempt to build a consensus for the future of the US markets and global markets.\u00a0 As of last week, it appears any potential trade deal with China has reset back to square one.\u00a0 The news we are reading suggests that China wants to reset their commitments with the US, remove all tariffs and wants the US to commit to buying certain levels of Chinese goods in the future.\u00a0 Additionally, China has yet to commit to stopping the IP\/Technology theft from US companies \u2013 which is a very big contention for the US.<\/p>\n

This suggests the past 6+ months of trade talks have completely broken down and that this trade issue will likely become a market driver over the next 12+ months.\u00a0 The global markets had anticipated a deal to be reached by the end of March 2019.\u00a0 At that time, Trump announced that he was extending talks with China without installing any new tariffs.\u00a0 The intent was to show commitment with China to reach a deal at that time \u2013 quickly.<\/p>\n

It appears that China had different plans \u2013 the intention to delay and ignore US requests.\u00a0 It is very likely that China has worked to secure some type of \u201cplan B\u201d type of scenario over the past 6+ months and they may feel they are negotiating from a position of power at this time.\u00a0 Our assumption is that both the US and China feel their interests are best served by holding their cards close to their chests while pushing the other side to breakdown through prolonged negotiations.<\/p>\n

Our observations are that an economic shift is continuing to take place throughout the globe that may see these US\/China trade issues become the forefront issue over the next 12 to 24 months \u2013 possibly lasting well past the November 2020 US Presidential election cycle.\u00a0 It seems obvious that China is digging in for a prolonged negotiation process while attempting to hold off another round of tariffs from the US.\u00a0 Additionally, China is dealing with an internal process of trying to shift away from \u201cshadow banking\u201d to eliminate the risks associated with unreported corporate and private debt issues.<\/p>\n

The limited, yet still valid, resources we have from within China are suggesting that layoffs are very common right now and that companies are not hiring as they were just a few months ago. One of our friends\/sources suggested the company he worked for has been laying off employees for over 30 days now and he just found out he was laid-off last week.\u00a0 He works in the financial field.<\/p>

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We believe the long term complications resulting from a prolonged US\/China trade war may create a foundational shift within the global markets over the next 16 to 24+ months headed into the November 2020 US Elections.\u00a0 We\u2019ve already authored articles about how the prior 24 months headed into major US elections tend to be filled with price rotation while an initial downside price move is common within about 16+ months of a major US election event.\u00a0 This year may turn out to prompt an even bigger price rotation.<\/p>\n

US Stock Market volatility just spiked to levels well above 20 \u2013 levels not seen since October\/November 2018, when the markets fell nearly 20% before the end of 2018.\u00a0 The potential for increased price volatility over the next 12+ months seems rather high with all of the foreign positioning and expectations that are milling around.\u00a0 It seems like the next 16+ months could be filled with incredibly high volatility, price rotation and opportunity for skilled traders.<\/p>\n

Our primary concern is that the continued trade war between the US and China spills over into other global markets as a constricted price range based trading environment.\u00a0 Most of the rest of the world is still trying to spark some increased levels of economic growth after the 2008-09 market crisis.\u00a0 The current market environment does not settle well for investor confidence, growth, and future success.\u00a0 The combination of a highly contested US Presidential election, US\/China trade issues, a struggling general foreign market, currency fluctuations attempting to mitigate capital risks and other issues, it seems the global stock markets are poised for a very big increase in volatility and price rotation over the next 2 years or so.<\/p>\n

Our first focus is on the Hang Seng Index<\/strong>.\u00a0 This Weekly chart shows just how dramatic the current price rotation has been over the past few weeks and how a defined price channel could be setting up in the HSI to prompt a much larger downside objective.\u00a0 Should continue trade issues persist and should China, through the course of negotiating with the US, expose any element of risk perceived by the rest of the world, the potential for further price contraction is very real.\u00a0 China is walking a very fine line right now as Trump is pushing issues (trade issues and IP\/Technology issues) to the forefront of the trade negotiations.\u00a0 In our opinion, the very last thing China wants is their dirty laundry, shady deals and political leadership strewn across the global news cycles over the next 24+ months.<\/p>\n

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The DAX Weekly Index<\/strong> is showing a similar price pattern.\u00a0 A very clear upper price trend channel which translates into a very clear downside price objective is price continues lower.\u00a0 Although the DAX is not related directly to the US\/China trade negotiations, the global markets are far more interconnected now than ever before.\u00a0 Any rotation lower in China will likely result in a moderate price decrease in many of the major global market indexes.<\/p>\n

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As we\u2019ve suggested within our earlier research posts, US election cycles tend to prompt massive price rotations when the election cycles are intense. In our next post PART II of this report, we talk about what happened in the past election cycles reviewing the monthly charts and weekly SP500 index charts which are very telling in what could be about to happen next for the stock market from an investors standpoint.<\/p>\n

For active swing traders, you are going to love our daily trading analysis. On May 1st we talked about the old saying goes, \u201cSell in May and Go Away!\u201d and that is excactly what is happening now right on queue. In fact, we closed out our SDS position on Thursday for a quick 3.9% profit and our other new trade started Thursday is up 18% already.<\/em><\/p>\n

Second, my birthday is only three days away and I think its time\u00a0I open the doors for a once a year opportunity for everyone to get a gift<\/strong>\u00a0that could have some considerable value in the future.<\/p>\n

Right now I am going to give away and shipping out silver rounds to anyone who buys a 1-year, or 2-year subscription to my Wealth Trading Newsletter. I only have 7 left<\/strong> as they are going fast so be sure to upgrade your membership to\u00a0a longer-term subscription or if you are new, join one of these two plans, and you will receive:<\/p>\n

\"\"<\/strong><\/p>\n

1-Year Subscription Gets One 1oz Silver Round FREE<\/strong>
\n(Could be worth hundreds of dollars)<\/p>\n

2-Year Subscription Gets TWO 1oz Silver Rounds FREE<\/strong>
\n(Could be worth a lot\u00a0in the future)<\/p>\n

I only have 13 more silver rounds I\u2019m giving away
\n\u200b\u200b\u200b\u200b\u200b\u200b\u200bso upgrade or join now before its too late!<\/p>\n

SUBSCRIBE TO MY TRADE ALERTS AND GET YOUR FREE SILVER ROUNDS!<\/a><\/strong><\/p>\n

Happy May Everyone!<\/p>\n

Chris Vermeulen – TheTechnicalTraders.com<\/u><\/a><\/strong><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders.com It is becoming evident that the US\/Chinese trade issues are going to become a point of contention for the markets going forward.\u00a0 We\u2019ve been review as much news as possible in an attempt to build a consensus for the future of the US markets and global markets.\u00a0 As of last week, it appears […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-147575","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/147575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=147575"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/147575\/revisions"}],"predecessor-version":[{"id":147576,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/147575\/revisions\/147576"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=147575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=147575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=147575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}