Telegram Trading

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Assessment: The things I am watching are the Chinese real estate situation and the 50 day moving average in SPY.

When it comes to Chinese real estate, there was some concern of contagion back in early 2022 (if memory serves) and it really shook up the US stock market. Mainly because so much of the Chinese economy is a house of cards and a shell game. In the end the Chinese were able to plug the holes in the dam and nothing came of it. Well those issues are back and if it gets ugly over there, it will get ugly over here. So, we really need to keep an eye on the latest from China to avoid complacency here.

As for the 50 day moving average for the S&P 500 ETF (SPY)…we closed on Friday at $445.65 and the 50 day moving average is $442.71. So, the 50 day moving average held, and SPY has trade above the 50 day moving average since March 29th. A break of this level would be psychological, but could trigger some people to eject, which could accelerate the recent decline. Friday was the closest price has gotten to the 50 day moving average since moving above it on March 29th. So that’s telling too.

The Chinese real estate situation is one of those that is getting a lot of discussion in trading floors, but which people assume will be all good…like the debt ceiling stuff. However, if one day we wake up and it isn’t good…this could be the event that launches the VIX higher and triggers some massive volatility shock in the markets.

For immediate purposes, the 50 day and how SPY operates for the day ahead will be the key.

Good luck in your trades!