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Today, we have important news about possible tariff discounts in China. President Trump suggested that “a 80 % tariff for China appears right” before the upcoming commercial talks with Chinese officials. This would represent a significant decrease from the current definitions, which reach 145 %.
What is particularly interesting – and the spirit – is the reaction of the lukewarm stock market to this news.
Despite what can be considered a positive usually for the economy (low tariffs), the stock market has not been enthusiastic. As of writing, Shares He retreated a little, which indicates one of two things (or both):
1. The market does not believe that these customs tariff discounts will improve financially economic ExpectationsOr
2. The market is preparing to decrease based on technical factors and feeling, which is overwhelmingly what could be positive news.
This reaction is in line with what I was discussing in the recent alerts – the selling prices do not always respond to news in direct ways, especially when technical conditions and locations in the market are already in a specific direction.
Skeptical bond market in commercial reinforcement
The bond market reaction to this news provides an additional context. Treasury returns have not seen a major movement, indicating that fixed -income investors are still skeptical about the long -term economic impact of these potential definition amendments.
From technology analysis Perspective, today’s price procedure confirms what the plans tell us: The market is likely to be a useful decline regardless of news flow. When the markets fail to gather in positive news, there is often a sign that the pressure remains dominant. In other words, although the stock move was less, the message is high: the stocks want to decrease here.
This is deep, because the performance of the stocks along with one of the US dollar index together provides a major background for many markets, including commodities (such as copper) and precious metals.
The latter also did something really great (and agreed with what I was writing for for several days now). They, rose again over a decrease of 2024 and a decrease in the resistance line.
Yesterday, before the assembly, I was commented on the above chart in the following way:
“On a short -term basis, we see that USDX is about to collapse above the acute and decreasing resistance line. At the same time, the USD will also restore the USD above its lowest level in the past year, thus nullifying the collapse.
This is the most likely way to move forward, and when that happens, it will be clear to many market participants that the trend has been reflected.
This is when the decreases in the precious metal market become much larger. “
In fact, USDX rose, and gold decreased. Today, the dollar index corrects this gathering, while gold corrects its decrease.
Looking at the outbreak of the rotor, this is completely normal, and since the falling resistance line – it was verified as support. This is the bullish preparation for the dollar index.
Verification of the collapse over the short -term resistance line as well as nullifying the movement below the low level of 2024 is very low. This is particularly the case, because many investors still hope for the American currency. (Reverse the Asian financial crisis, which person?)
Thus, today’s step is higher in gold are few consequences. The same applies to silver and mining stocks.
Detamental momentum builds gold
The result is that the last Gold performance in prices is clearly different from what we saw earlier this year, when gold was approaching its highest levels. The assembly was temporary, just as I warned.
Gold is used to move to the previous highlands in a fixed manner and then break it. There was once a small pause after penetration, but there were no corrections before collapse, not to mention major operations.
The fact that we have seen a significant decrease in Gold this week and the move to the 38.2 % Fibonacci alternative (yesterday’s closure) clearly proves that the previous upscale style has been broken.
Now, with USDX checking, the possibilities of gold will continue in the following days/weeks. This translates into the same view of silver and mining shares.
And if the shares decrease – it is likely to do so – it is possible that the decrease in silver and the mining workers are hidden.
Also, since the definitions are now moving down, the appeal based on the gold tariff and uncertainty will decrease. At the same time, the definitions are likely to remain high enough to cause economic damage to the world’s economies, and to support the decline in stock markets and commodity prices. Of course, there are ways to win this position.
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