Stay Tough, My Friends

The toughness needed to survive various market cycles ought not be lost on any of us, especially with the price action we have seen this spring in the face of a tough-talking trade war. 

With the S&P 500 Index slicing back up through its 200-day moving average today, though, as seen on its ETF's daily chart (below), bulls may have earned something akin to a respite from the constant barrage of headlines which have slowed down even the most die-hard equity bulls. 

To be sure, bulls will argue that the FANG and software dump yesterday amounted to a final shakeout of longs before a new uptrend commences. But that line of thinking is a working thesis, at best, until we see some follow-through higher beyond today, assuming today closes reasonably well, too. 

One other aspect of today's session so far is how many relative strength names during the correction are exploding, now that the broad market tensions have abated for at least a few hours: The likes of DECK SNAP WING, alongside some biotechs like QURE, are all good examples. 

Still, with the small caps and Nasdaq below their respective 200-day moving averages the take-home message is that bulls have a formidable task ahead of them in June if they are to wrestle back the initiative and stage a surprise summer rally just when all of the news flow seemed to be pointing towards a 1937/1938 trade war calamity for equities and the economy at-large.