SPY ETF: Trump Good News, Market Bad Action

The news that President Trump was exonerated should have sparked a rally in the S&P 500 ETF (NYSEARCA:SPY). It did not.

That is a glaring bearish sign of good news - bad action. When you expect up and get sideways you know there's something else pushing the other way.

We think the market is about to start pointing lower. The trade news that Trump plans to extend tariffs even after a deal is signed with China is underappreciated. Tariffs have slowed down tech spending and the extension of those tariffs should continue to slow down tech spending.

Meanwhile, many semiconductor companies, including Micron (NASDAQ:MU) last week, are expecting a pickup in the back half. That's despite seeing a slowdown currently. The extension of tariffs will likely offset and push-out those expectations.

Technically we think we're about to point lower which will match fundamentals which have been slowing, a la Micron last week. Why do I focus on Micron? Because memory is in pretty much everything tech. For me it's a tech bellwether and when you have revenues falling off drastically that's another datapoint that tech's not that strong.

And when you have companies continue to keep expectations high despite the slowdown more risk is building.

With fundamentals down and technicals about to point lower now, be careful.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. We have no holdings in the stocks mentioned unless otherwise noted.

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