Stocks Take Out Critical Support: SPX 2,300 Next?
Phoenix Capital Research | Jun 28, 2018 02:25PM ET
China has gotten tired of playing “tariff tag” with the Trump administration. It’s now playing a new game called the “devalue stock dump.” It consists of China aggressively devaluing the Yuan in an effort to crash the US stock market.
If you think I’m being overly dramatic here, have a look at the below chart. This current devaluation is already on par if not worse than those of August 2015 and January 2016.
PowerShares DB US Dollar Bullish Vs. WisdomTree Chinese Yuan Strategy
By the way, those last two devaluations (red boxes) resulted in the S&P 500 dropping 11% and 12% in less than one week.
Put simply, China is done messing around. It is actively trying to crash the US stock market to send a message to the Trump administration. China knows that President Trump views the stock market as a “report card” on his performance as Presidency.
Bear in mind, most Emerging Markets (including China) are already in bear markets, having dropped ~20%. If the US stock market follows suit, we’re talking about the S&P 500 down in the 2,3-00-2,400 range.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.