The world has divided into different parts, which must gratify Mr Trump's handlers. China's equity market has dropped quite hard and has now provided a bottom extension, as shown in the first chart below. Despite the rhetorical ripostes coming from Beijing, it is clear that China has more to lose from a trade war with America than America itself does, and so this drop seems appropriate. Mr Trump may reverse himself at any time as experienced deal negotiators apparently often do but the damage seems to have been done to China's market which would probably not regain all its losses on a leap of hope even if a tweet comes from the White house saying that all is forgiven. Nonetheless, a pause or temporary reversal of the drop is likely from hereabouts.
The US will also suffer from a trade war (once memorably described as 'blockading your own ports') of course, just not so much. Accordingly, US equity markets are also falling, just not so much. We will try to identify moments when it is appropriate to cover and maybe even buy for a bounce, as we always do. It is probably just better to sit on short positions for the moment and keep your eye on the turn schedule on the front page of the site for clues as to when a bounce might start.
Elsewhere, markets are not as weak and the FTSE has even made a new compression, as the second chart shows. This may break down of course and start a downtrend there too, but it hasn't yet.
All signals courtesy of software supplied by our friends at Parallax Financial Research www.pfr.com