Market waves and ripples

Mid-week market update: Charles Dow once characterized the stock market`s price movement as being composed of tides, waves, and ripples. We can see a mini version of this thesis by the market's action in the past week. The major indices had staged an upside breakout through a downtrend and sentiment had turned bullish.

This week, the narrative became more cautious:

• 10-year bond yields had spiked significantly above 3%.
• The US-North Korea summit is at risk of going off the rails.
• The anti-migrant Lega Nord and anti-establishment Five Star Movement are on the verge of forming the next Italian government.
• The Sino-American trade talks are undergoing their own roller coaster. Trump's weekend "rescue ZTE" tweet was followed by a White House clarification that walked back some of rhetoric.

Which is the wave? Which is the ripple?

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