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Trade War Friday – Game on Again as Trump Throws Speech Out

The only thing we can count on these days is chaos and God bless it because we're having THE best time trading it!

Holy cow!

Things are just getting nuts now. Trump declares unilateral trade war on China, China retaliates, White House says "just kidding" and then Trump says "not kidding" and TRIPLES the tariffs by adding $100Bn more and then he literally tosses out his prepared speech as it would be "too boring" and then began ranting about immigrants, claiming they illegally voted against him and that women are being raped by them "at levels that nobody has ever seen before – THEY don't want to mention that."

The only thing we can count on these days is chaos and God bless it because we're having THE best time trading it! In our Live Chat Room yesterday, when the White House was busy walking back Trump's earlier comments on trade, I said to our Members:

Watch out for any of the levels that are now Green (or black) to turn red – that's a good sign to short the indexes. 6,650 on /NQ is a good line and it's lined up with 24,350, 2,660 and 1,540.

That was our only official play of the day but it was good for profits of $3,000 per contract so, no need for more, right? We knew 6,650 was going to be resistance (between our weak and strong bounces) and, of course, we also knew Trump was going to continue to attack Amazon (AMZN) and that casts a shadow on the whole tech sector because – if the President of the US can harrass one tech company – what's to stop him from going after others and, with that precident set – what's to stop every World Leader from going after their political business enemies like Trump does?

America used to lead by example and God help us all if the rest of the World begins to follow our current example!

As noted by Joe Scarborough on MSNBC: "Lies about [Amazon], causes its stock to go down. I’ve watched enough episodes of Billions to know that if you’ve spread lies about a company or product to cause its stock prices to go down . . . the SEC should be coming after you.

This is an excellent point, either the SEC at least investigates Trump's attacks on Amazon and that sets up a Constitutional Crisis or the SEC ignores Trump's action and we declare open season on any company the rich and powerful want to put in their cross-hairs. Probably the latter – good night and good luck…

8:30 Update: Oops, and now we have a huge miss on Non-Farm Payrolls, only up 103,000 in March so a 50% miss by "leading economorons" who were looking for 200,000 and it's off a cliff from 320,000 in February – so much so that Unemployment actually moved up from 4% to 4.1%. Nonetheless, wages continue to inflate, up 0.3% for the month as 4.1% is still a very tight labor market. It's very possible the poor jobs numbers reflect a bit of blowback against the higher wages being demanded by empowered workers.

Actually, the poor jobs numbers may work in our favor as it keeps the Fed at bay so we can play for the quick bounce off that 6,500 line on /NQ with very tight stops below as well as, of course, our 2,640 line on the S&P (/ES) which, as I noted in our Morning Alert (follow us on Twitter), is still a great indicator. Once those lines break down, we can use them to short again – I'll update that in chat, of course.

Meanwhile, now China is threatening to retaliate in kind to Trump's latest trade rant and, don't forget, we're supposedly going to put the negotiator-in-chief in front of both Vladimir Putin and Kim Jong Un – either of which meeting could quickly degenerate into a button-pushing contest and the fact that you don't think that's a completely ridiculous statement is TERRIFYING, isn't it?

Have a great weekend,

  • Phil