US-China Exchanges Are Roiling The Markets

Good Tuesday Morning, MPTraders!  October 14, 2025-- Pre-Market Update: Equity markets are under pressure again from geopolitical event risk. ZeroHedge has a succinct description this AM: 

-- Global equity futures slipped on Tuesday after China vowed to "fight to the end" in its trade war with the U.S., following President Trump's threat last week to impose 100% tariffs on Chinese goods. Despite Washington's attempts to soften its tone over the weekend, tensions are intensifying into the new week: both countries are imposing new docking fees on each other's vessels, signaling deepening Sino-US relations ahead of Trump-Xi talks. Adding to the flaring tensions, Beijing sanctioned five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean, while U.S. Treasury Secretary Scott Bessent accused China of deliberately undermining the global economy...

-- Whether or not this latest statement of trade antagonism from China is a reflection of President Xi exerting control (over the more conciliatory party elders) or not remains to be seen... Whatever the case, the US-China exchanges are roiling the markets...

-- In a typical algorithmic reaction, ES plunged in overnight trading from last eve's high at 6718.50-- just shy of the all-important 20 DMA, to this AM's low at 6605.75 (-1.7%), which we see on my attached Hourly Chart found support at the 6600 Big Figure level-- and at the 50 DMA (see my attached Daily Chart) before bouncing to 6640 during past hour, perhaps in reaction to better-than-expected big bank Earnings... 

-- As we discussed late yesterday, my intraday pattern work argued that the upmove from Friday's Trump Tariff Tantrum Low at 6540.25 to above 6700 exhibited counter-trend form. This is what we discussed during the final hour of trading:

... As long as 6700 to 6722 keeps a lid on additional strength, and considering my intraday pattern work does not exhibit bullish form (instead, it exhibits counter-trend form), I cannot rule out an ES rollover that revisits intraday support at 6650/60, which if violated, will point to 6600 thereafter... Last is 6700.50...

-- ES followed my projected price path extremely closely. If it continues to do so, then any additional recovery strength off of 6600 will stall and roll over again EITHER at 6655/65 OR at 6680/95, from where the index will press below 6600 toward a full-fledged retest of Friday's Trump Tariff Tantrum Low-zone at 6550 to 6540... 

-- Only a climb and CLOSE above 6720 will invalidate my current negative near-term setup... Last is 6635...

-- Quietly, benchmark 10-year YIELD has slid to 4.0%, now sitting at 4.02%, which we see on my attached Daily Chart represents a retest of the April-October 2025 support line that if violated and sustained, will point to a retest of the April 2025 low at 3.90%. Perhaps buying longer-dated Treasury bonds reflects BOTH the ongoing Government shutdown, now in day #14 AND a flight-to-safety (considering how overbought Gold is perceived to at this time)... 

-- Keep in mind that Fed Chair Powell gives a speech today at 12:20 PM ET which probably will be closely monitored for clues about the likelihood of another rate cut at the upcoming end-October FOMC meeting...

-- Finally, let's be aware that today is Trading Day #197 for 2025 within the seasonally most negative trading day period from day #180 to day #200, which means the most intense portion of the seasonal negativity could last into Friday's close... 

Next Up: JPM post-Earnings update...