If we have been apathetic to the developments of the world, perhaps it is time to heads up and take note. Last week’s global (and particularly US) events riled the markets, and this week started with the consequences. Word here to note is started. It is not going to be the end game yet, but it is definitely the start of one.

On Monday afternoon, China took (pre-emptive) action by delivering their promise of consequences in response to US President Trump’s tariff announcement. They weakened the Yuan drastically and additionally halted crop imports.

Ouch… to the pain really begins!

And below it the chart of the massive devaluation, over 1.5% and breaking the psychological level of 7.0 effectively.

These actions have a huge effect on the markets…

The S&P500 and NASDAQ futures are -1.5% and -1.7% down, way past the 55EMA. On the other hand, Gold and Silver futures are UP 1% and 1.4%, respectively.

As expected in the weekly review, it is probably going to be a Down Friday Down Monday, increasing a very high probability that the next two weeks would be down. Furthermore, according to the Stock Traders’ Almanac, there is significance for this as a signal for market tops.

Be careful…

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