Like Night & Day

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Perhaps you have noticed the market lately has been jerked back and forth with more energy than we’ve seen in a long, long time. It looks like a photograph of a handsaw:

Of course, this has all been a result of the trade talks breakdown between the U.S. and China. Even when the story broke last Sunday, no one believed the sides would actually part ways. The experts, including Goldman Sachs, were stone cold wrong. Probabilities as recently as Wednesday were cited as 15% for an actual imposition of the tariffs, and yet they happened.

I’ve noticed a pattern, however. And it isn’t subtle at all. In fact, the pattern has become so obvious, I’m starting to wonder just how stupid The Powers That Be must think we are. Because the pattern is as follows: (1) facts-based bad news at night; (2) fantasy-based political jawboning in the daytime.

In other words, the Chinese and American leadership fall all over themselves during regular trading hours to try to prop up this circus tent, whereas nasty old Truth comes out between sessions, hopeful that people will swiftly forget the information.

Allow me to illustrate this; below are the kinds of headlines that battered equity prices. Every single one of these came out during NON market hours.

Indeed, the Dow Industrials had over 1,000 points blown off of its index in a span of hours thanks to say of the Actual Facts-Based Truth that came out above.

But there’s an answer to this. An answer that apparently neither algos nor humans are intelligent enough to ignore. And that is: political horseshit. Please allow me to present Exhibit A:

For the love of GOD, people: for the past two years, all we’ve heard about is how Constructive talks are, and how Well they were going and how much Progress was being made. And, in the end, we have wound up with something as impressive, sturdy, and tangible as the Mexican-funded wall which spans from the Pacific Ocean to the Gulf of Mexico on our southern border.

Put another way: zilch.

And, true to form, the moment the vibrations from the closing bell on the NYSE stopped ringing on Friday, this news just happens to come out:

In other words, new tariffs were announced that DWARF those announced earlier.

If we just let plain, simple facts flow, and the politicians kept their lying mouths shut, we’d already be under 20,000 on the Dow. The most adept day traders are printing money in this sawtooth market. For everyone else, it’s a vomit-inducing roller coaster, and the rails are starting to come off.