Trade war between China and the United States continues to weigh heavy on the stock market particularly affecting the large cap stock that do business with China, such as Boeing, Caterpillar, etc, which sold off hard on Tuesday.
Trade war should intensify going forward and it is very deflationary. Already the Dow is on the verge of breaking below its key 50-day moving average. A break below will be very bearish and could drag the other market down with it.
With everyone long the market, believing Central banks will continue to support the market, and without any other buyers except central banks, a break below key technical support could crash the stock market very quickly.
For NQ on Wednesday, key inflection price level is 7230, bullish above, bearish below.
