The trope, which didn’t even exist half a year ago, has already become tired: Trump says something big and brassy, the financial markets plunge, and he does a complete 180 and reverses the damage (almost certainly profiting from a huge trade in both directions).
It happened again over the past few days, of course, with your President shrieking about 100% tariffs against China (causing a massive equity and crypto collapse), then almost immediately thereafter pouring over the treacle of “the Great Chairman Xi” crap, thus creating a huge rally on Monday. Except for two stupid precious metals shorts, I covered absolutely NOTHING, because I figured the broken trend was my ally. For the moment, it seems this steadfastness has worked out.
Look, I think the whole “chicken” thing misses the mark. Shameless draft-dodging notwithstanding, the man isn’t a chicken per se. He doesn’t change his mind because he’s afraid. He changes his mind because he is a capricious and principal-free hodgepodge of childish impulses and reactions. As I stated over the weekend, his firm statements about anything, be it tariffs, his wedding vows, his promises to pay vendors, or his thousands of campaign promises, don’t mean a goddamned thing. They are as fleeting and ephemeral as the busboy clearing your table. Thus, the /NQ (above) and the /ES (below) have started to severely distrust the guy, which is why even a total reversal over the weekend only mean a PARTIAL recapture of prior price levels. Yesterday’s pop is all yer gonna get.
The small caps have been even weaker, bleeding out to lower highs from day to day.
All of which has meant that, since just yesterday, fear (by way of /VX) has been allowed back into the room without hesitation. The real “chicken” has become the market, which is getting kind of tired of the vacillating ramblings of this lunatic.
I thus come into the trading day armed to the teeth with shorts, 100% of which are down pre-market. I’ve been beating myself up mercilessly about daring to defy precious metals, but even though I’ve sworn off trying to short GLD, SLV, GDX, or, heaven forbid, XME, I betcha betcha betcha the top was reached last night during that one last orgiastic splooge. I won’t do it, but I think shorting the bejesus out of the miners is probably a slam-dunk trade.
In any case, it’s looking like a good opening. I hope you stayed on the bear team. Our time has come.
