Morning Comment: The University of Iowa "Wave"
- “Quadruple Witch” expiration today.
- The current trade talks are not focusing on any of the all-important long-term issues.
- The global intelligence community was taken completely off guard by the Saudi attacks.
- China’s stock market stands at a key technical juncture.
- The University of Iowa “Wave”….and what it says about the people of our “fly over” states.
The big "expiration" means we won't derive much from today's action
Today is a “quadruple witch” expiration day, so it’s going to be hard to derive much (if anything) from today’s action. The average volume on these big expiration days (that take place once a quarter) is about 4.9bn shares on the composite volume. That’s more than 50% greater than the average daily volume we’ve seen over the past three yeas, so you can see how these quarterly expirations can skew the data for the “internals” on these days.
The U.S. & China are talking...but only about an interim deal
The major stock indices did not see much of a move yesterday…as we saw a mirror image of the previous day. Instead of selling off early and then bouncing back to the “unchanged” level like it did on Wednesday, the stock market rallied in the morning and rolled back over in the afternoon. If there was anything that stood out to us yesterday, it was the news that the newest trade negotiations between the U.S. and China involved the issues of currencies, fentanyl and agricultural products. In other words, the key issues like intellectual property and verification that could create a major and important long-term agreement are not on the agenda. On the one hand, maybe that increases the odds that we’ll have an “interim” deal, but on the other hand, it means that the trade war ...