Hello traders everywhere. In early trading, the stock market was once again setting record highs on the back of an approved phase-one trade deal with China. Those record highs have triggered new green weekly Trade Triangles for the DOW and S&P 500, indicating that we are now back in strong long-term uptrends. On the flip side, the U.S. Dollar Index has not fared so well, issuing a new red monthly Trade Triangle indicating that the dollar is under pressure and entering a long-term downtrend.
However, the euphoria has since dissipated, and the major indexes have dipped into negative territory for the day. All three indexes will post weekly gains of roughly S&P 500 +.57%, DOW +.32%, and the NASDAQ with an increase of +.81%.
The trade deal will include a rollback of some of the China tariffs and halts additional levies set to take effect on Sunday. China agreed to significant purchases of U.S. agricultural products but failed to give a specific amount, disappointing some investors who expected a firmer commitment.
Chinese officials said China and the U.S. reached an agreement on the text of the phase one trade deal. The next step is for both sides to go through legal steps and set a time for signing the deal, according to a CNBC translation. Chinese officials also said tariffs would be rolled back in phases. Agricultural purchases by the Chinese will increase, but officials did not specify by how much.
President Donald Trump later confirmed that a trade deal had been reached. As part of that agreement, new tariffs set to take effect Sunday will be scrapped. He also said some of the prior duties on $120 billion worth of Chinese imports will be rolled back.
In a series of tweets, he said: "We have agreed to a very large Phase One Deal with China. They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more."
However, China remained quiet after news of the agreement broke. Official Chinese state media has yet to comment on the report. A source also told CNBC's Eunice Yoon that China has concerns over hard agricultural purchases being pushed by the U.S. There are also worries that Trump could hit China with tariffs even after a deal is reached, the source said.
Key Levels To Watch Next Week:
- S&P 500 (CME:SP500): 3,070.33
- Dow (INDEX:DJI): 27,325.13
- NASDAQ (NASDAQ:COMP): 8,435.40
- U.S. Dollar (ICE:DX): 98.54
- Gold (NYMEX:GC.G20): 1,465.50
- Crude Oil (NYMEX:CL.F20): 58.83
- Bitcoin (BITCOIN:BITSTAMPUSD): 7,772.71