Recent Signs of Weakness in the U.S. Stock Market
The post lists five signs of weakening in the U.S. stock market, including the U.S.-China trade war, index pullbacks, and key stocks failing to make new highs.
【Recent Signs of Weakness in the U.S. Stock Market】CLEC Investment Club Written date: May 22, 2019
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The U.S.-China trade war is gradually losing control. The United States is imposing an embargo on China almost like those applied to Iran and North Korea. China's recent statements are tough. Based on our understanding of China, it does not look like China will compromise with the United States. Both sides will increase pressure on each other. This will be a long-term continuing issue and will cause long-term negative effects on the U.S. and even the global economy.
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The index has reached last October's historic high. A pullback is normal, but under the influence of the trade war, the pullback has been too fast. Even if it is only a correction, the pullback will still be deep.
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The index has made a new high, but all the bellwether stocks, AAPL, AMZN, GOOGL, FB, and NFLX, have not made new highs. Some are still some distance from their highs, some have already formed tops, and some have formed a three-line bearish alignment. This represents signs of a weakening economy.
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Both the index and the bellwether stocks have been moving sideways here for more than two years.
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I know market investors do not feel overheating, but weakening market momentum can be seen from the bellwether stocks. Together with the trade war losing control, this may create a bubble formed by the combination of market forces and external policy forces.
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