The Gilmo Report

July 12, 2018

July 11, 2018

The announcement of more U.S. tariffs on an additional $200 billion worth of Chinese goods yesterday after the close upended a four-day market rally. The news sent the futures down hard overnight, leading to a gap-down open this morning, sending all the major market indexes down on the day.

The NASDAQ Composite Index came within 0.4% of its all-time highs yesterday, but the action was already showing signs of tiring as the index churned and closed below its gap-up opening price. Thus, today’s pullback wasn’t necessarily abnormal within the context of the overall action over the prior four days.

However, whether this is just a pullback or the start of a potentially deeper correction of a double-top type of set-up remains an entirely open question. For now, the critical test will be to see how the index holds the 20-dema on any further pullback from here, or whether it simply holds tight up near the highs.

 

GR071118-$COMPQ

The rest of this report is available for Gilmo Report Members only.
The full report will be available 45 days after it is posted. For immediate access: login or subscribe

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2018 Gil Morales & Company, LLC. All rights reserved.