Outlook 05/29: China is ready to use rare earths to strike back in the U.S. trade war, the ruling Communist Party's People's Daily warned overnight, saying in a strongly worded commentary "don't say we didn't warn you." Rare earths are a group of 17 chemical elements used in everything from high-tech consumer electronics to military equipment. U.S. stock index futures slipped further on the news, with the SP500 pointing to a 19 point loss, while the Shanghai rose as much as 1% during the session, boosted by shares of rare earth miners in Asia Pacific.
/ESM19 Value: YVAH 2842 YPOC 2832 YVAL 2819 GAP 2804.75
/ES Plan: Yesterday market closed bearish and overnight continues on that way (GBT 2769) moving below yesterday's range, so options are:
A) If market remains below LIS-HVE 2789 with bearish internals, sell towards HVE 2784 ONL 2782 HVE 2775 and HVE-GBT 2769.
B) If market starts to move above 2789 with bullish internals, buy towards HVE 2796-2802 ONH 2806 and HVEs 2808-2814-2819.
Tips: Usually after an overnight sell-off like today, we can expect a counter-trend move after the regular open. Despite of that, double digit gaps rarely get filled on the first day. Don't be anxious and wait for the first clues about the dominant force. Let see.
Today's Economic Calendar
10:00 Richmond Fed Mfg.
10:00 State Street Investor Confidence Index
01:00 PM 7-Year Note Auction
Questions via @verniman direct message (RTH) or email (After Close).
Glossary of terms
