By Chris Becker
It was all about the US/China “phase one” trade deal on Friday night markets with a surprising reversal after the usual all-in sentiment moved to one of caution, with scratch results on Wall Street the result. European markets absorbed the UK election results with some volatility as Pound Sterling calmed down after a 2-handle move higher as Brexit is baked in for certainty. As we move into the Christmas season, the Santa Claus rally is likely to continue, but watch out for increased chances of gaps, reversals, breakouts and other high volatility moves as volume starts to lower and positioning becomes more apparent.
Looking at the action on Asian markets on Friday the Shanghai Composite surged nearly 2% higher, finishing at 2967 points and almost ready to break through the 3000 point barrier. Meanwhile the Hang Seng Index continued its own breakout, closing 2.5% higher to 27687 points. The daily chart shows how large this breakout is but also clearly shows the potential for a reversal as price was beaten back (see the long wick above the tight open/close):
