Let’s take a look at the past few weeks, shall we?
Those tints are there for a reason. Let’s hit ’em:
- Yellow: Liberation Day! This was, of course, the day it was announced that on a day Trump predicted would be remembered as one of the greatest in American history (!) that we were cranking tariffs sky-high on countries around the world. Promises made. Promises kept. (I’ve put the video of the whole speech below for your viewing pleasure and just plain lulz).
- Green: Surrender #1: in spite of endless pronouncements of toughness and steadfastness, Trump folded like a lawn chair the very next week, “suspending” (cancelling) the tariffs on all countries except China. The market rallied mightily.
- Blue: Surrender #2: “exceptions” were announced for China so that hefty tariffs would be levied on things like crappy stuffed dolls but waived for electronics and smart phones. The market rallied mightily.
- Grey: Surrender #3: Both the Treasury Secretary and Trump allowed that the China tariffs were not sustainable and that they would be going down substantially. The market rallied mightily.
Now, look, I’ve heard the 4D Chess arguments already. Let’s think of this in terms of a continuum.
On one extreme is the group that believes this was the plan all along, and the Art of the Deal is being executed with unmatched genius. Suck-ups like Grant Cardone tout this point of view. On the other extreme are the folks like me who believe he’s Making It Up As He Goes Along and is simply shifting direction based on the market freaking out.
The arrow below is on Liberation Day, and the reaction to it is obvious, just as the reaction to the aforementioned trio of surrenders has been as we approach, once again, the same level on the /ES.
Yesterday was brutal for the bears, and today’s open will be as well. One thing that’ll lighten the pain for me considerably is, against all good judgment, I went bearish on precious metals yesterday just after I published this premium post. Gold is down over $100 from yesterday……..
……and my big GDX (miners) short is doing well too.
On both Monday and Tuesday, I made a case for oil peaking and reversing away from its failed right triangle pattern, and that’s playing out nicely too.
Don’t get me wrong – the open’s going to suck for me – but it won’t be nearly as bad as it otherwise would have been, and frankly, at these lofty levels, I’m way more interested in getting into new positions.
Whatever camp you fall into, there’s no doubt the past three weeks have been head-spinning. It frankly doesn’t matter if one believes if this was all a brilliant plan or of this was a complete cluster-you-know-what. D.C. is still bowing to the market gods, and folks will think whatever they want to think about the nation’s leadership.
For myself, I’ll be taking a good hard look at all my positions today, fine-tuning where necessary, covering where necessary, and, where appropriate, taking on new positions at these much higher prices.
This isn’t anywhere close to being over yet.
