China Trade Deal Optimism Sinks Gold, Sends Equity Futures Flying
S&P futures are up 27 points and gold futures are down $10 as I write these words. The culprit? China trade deal optimism as high level talks between the US and China continue for a 2nd day in Washington. CNBC even went as far as to analyze the amount of time Liu, Lighthizer and Mnuchin spent outside the building before entering, in order to give the cameras ample photo ops. Certainly that must be bullish, right?
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The recent stalling around the 50-day SMA and the Daily-RSI(14) median line is indicative of a market that is still within a digestion and base-building process. Gold needs some more time to set up the next leg higher, it's really as simple as that. This is normal and healthy bull market action, and this process could play out for another 3-4 weeks before we see that next uptrend begin to take hold.
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