Wall Street bulls buy the dip
|- Investors are trying to find a bottom in the market as they are buying the S&P sectors with the worst price momentum of the last weeks.
- Treasury Secretary Steven Mnuchin and his financial team are in China to try to find a solution to the trade wars.
The S&P 500 dropped below its 200-period simple moving average on the daily time frame, however, investors bought the dip buying sectors which had the worst performance in those last weeks: industrials, consumer staples, semiconductors and gold; suggesting that the market is trying to find a bottom, or at least a short-term one.
"The market got very cheap and buyers just came in. I mean you'll still seeing sectors like banks lag, but industrials had a really nice bounce. A stock like Boeing, which has been really dragging lately, found a nice bid this morning." commented Jeremy Klein from FBN Securities.
On the geopolitical front, the Treasury Secretary Steven Mnuchin is in China to meet with the Chinese Vice Premier Liu He. The talks are revolving around the trade disputes between the two countries. “Our great financial team is in China trying to negotiate a level playing field on trade! I look forward to being with President Xi in the not too distant future. We will always have a good (great) relationship!” said President Trump with his favorite social media platform, Twitter.
"Trump's 'level playing field' implies a harder line and general sentiment around the talks is going to be volatile. Chances of a grand bargain are virtually nil but the market does want a de-escalation of trade tensions." according to Tom Essaye, founder of The Sevens Report.
S&P 500 daily chart
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