MON-WED’S ACTION: Stocks Flirt With New Highs
Stocks opened lower on Monday after China released disappointing trade figures for February. China said its trade balance tanked from a surplus to a deficit of $22.98 billion (expected surplus of $14.50 billion). Exports plunged by -18.1% (expected +6.8%) which bodes poorly for the global economy. The report showed that imports rose by 10.1% (consensus +8.0%) which suggests their internal demand remains firm. Plunging exports spooked investors because China’s export data is used as a proxy for global economy growth. Some analysts tried to dismiss the big miss due to the Lunar New Year, which took place at the start of the month. I don’t buy it because that should disrupt both sides of the equation, not just one.
THURS & FRI’S ACTION: Market Sells-Off
MARKET OUTLOOK: STRONG UPTREND
After an 8.4% rally in 6 weeks, the market is finally taking a breather. We will continue to monitor the health of this pullback to see if it is just another healthy pullback or turns into something more severe. At this point, more damaging evidence is needed before the bull market breaths its last breathe. As always, keep your losses small and never argue with the tape.