China’s retaliation of 5% tariff on $60B of US goods after Trump’s 10% tariff on $200B of Chinese goods was less than expectations and thus became bullish for US stocks.   Is this a sign towards resolution?  Not sure, but the markets seem to be taking it as a sign.  Resolution in the short-term (i.e. before the November US mid-term elections) would most likely be very bullish for US stocks.  The economic calendar focus is Housing Starts @ 10:00am EST and Oil @ 10:30am EST.  ECB’s Draghi has a talk starting @ 9:00am EST although it’s been a long while since his comments have affected the US markets.  Only company of note with earnings is RHT.  Volatility increased yesterday and now the ES is once again pinned under its back-adjusted all-time high.  Expect upside volatility to be muted while the market wait on additional US/China or US/Canada trade war information.  No Size bias as overnight volume was too light.

US and global stock markets are a little rattled by Trump comments concerning a scheduled June 12 Singapore meeting with North Korea and US trade war progress with China.  The US and South Korea held a joint military exercise last week and now Trump is saying there’s a good chance the North Korean meeting will not take place on June 12, but still a good chance it will at some point in the future.  About the trade negotiations with China, Trump said it’s “a start” but he was “not pleased” with the progress.  US retailers Target and Lowes missed earnings estimates while jeweler Tiffany & Co. crushed their expectations.  The economic calendar focus is Oil @ 10:30am and Fed minutes @ 2:00pm EST.  Before the main events, we have PMI Composite Flash @ 9:45am EST and New Home Sales @ 10:00am EST.  The ES has pulled back enough where upside volatility should not be hindered as we’ve experienced over the last week.  Volatility continues to contract, but there’s more room to expand now.  Size bias is short on increased Globex volume into the US session open.

The ES is up slightly overnight as trading volume continues to dry up into the long Christmas weekend and as many traders take the rest of the year off.  Congress narrowly avoided a government shut down by passing yet another temporary spending bill.  Bitcoin’s wild ride continues as the cyprotocurrency has dropped nearly 40% this week, from a high near $20,000 to a low of $12,560.  The new CBOE and CME bitcoin instruments have finally provided traders a way to short…  The economic calendar focus is Durable Goods @ 8:30am EST and New Home Sales and UoM Consumer Sentiment @ 10:00 am EST.  It’s possible price whippiness could continue today; it’s expected that price movement will start dying down as the day wears on.  Size bias is short into the Durable Goods numbers; however volume was so light overnight that the Size bias should not be given much weight…