Well, that’s that.
The Liberation Day fanfare from just over a month ago has been rendered an utterly pointless exercise. Although merely a week later, on April 9th, the trade wars were effectively cancelled (as well as all the tariffs that ostensibly would have made the IRS unnecessary), there was one gargantuan issue still remaining: China.
Now, with a 90-day pause (read: a total Ctrl-Z of what was executed, with 90 days being enough time for folks to forget anyone even mentioned it), the trade wars are kaput, as is all the anxiety around them, as plainly illustrated by a VIX which has, yes, returned to the teens.
The news about China came in two bursts. The first was a feel-good press conference by Bessent, which immediately launched asset markets higher. They began a wait-and-see-what’s-next game, going nowhere, until China and the U.S. announced a nearly complete roll-back to tariffs in both directions, pledging to figure something more permanent out in 90 days. It was the ultimate kick-the-can down the road scenario on a global stage.
The blue horizontal shown above represents the last line in the sand for the bears, which was the March 25th peak. As shown with the weekly chart below, the arrow marks the bulls’ success in brushing aside this final resistance. Lifetime highs within weeks is a real possibility for the /ES.
The /NQ was an easier market to conquer, with the March 25th peak curb-stomped.
Of course, some markets are down, but only those which represented some kind of safe haven or panic room in April. Gold, for instance, has been plunging for days, having lost over $200 in just a few sessions.
Bonds, too, are falling, which sort of highlights the irony of this whole situation since continuously rising interest rates aren’t exactly an elixir for the economy or the $37-trillion-in-debt nation either.
The last man standing in Fibonacci land is the Russell 2000, shown here on a weekly bar chart with the /RTY futures. This market is by far the strongest right now, sporting a nearly 5% rally as of this composition, but – – for now, at least – – the $2150 Fibonacci is uncrossed. (I would hasten to add that the $1712.80 Fib was almost perfectly tagged on April 7th, as also shown below).
The Russell notwithstanding, I think it’s time for the bears to borrow a flag that has received a lot of use in recent weeks with the so-called trade wars.
We are heading into an exceptionally strong opening, and it will be extremely telling to see where things wind up at the end of Monday’s session.
