Stock Market Surrounded in Positive Support

August 7, 2018 10:25AM CDT

The S&P this morning is acting very well, currently up $7 at 2856 and the Dow futures are up 100 at 25,574.  Today’s gain came after China overnight had its biggest one-day gain in over two years.  This is quite impressive considering the ongoing tariff talk.  My best hypothesis is the tariff verbiage that has been ongoing with the US and China is either going to be settled shortly or the market doesn’t care anymore.  Either way, S&P seems poised to test old highs of 2787.   Another positive from the massive move overnight in China is that it seems that many of the commodity currencies have bottomed.  That being said, one could argue any verbiage of deflation that could have been caused by the ongoing tariff talk are certainly put on the backburner for now.  Crude oil is near 70$ barrel, 10-year yield is around 2.95% which are all positives for a continued move higher in the stock market.  Traders should continue to watch the price of copper which is currently trading at 275.90.  The contract low is 267 and change.   Copper is often viewed as a gauge to how are economy is doing.   My thoughts are that we have seen the lows in copper and traders should expect a rise near $3 in coming weeks.  The economic calendar is light today, but I wouldn’t be surprised to see the stock market continue to grind higher near the all-important 2878 level.

E-mini S&P 500 Sep '18 Daily Chart

E-mini S&P 500 Sep '18 Daily Chart

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