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Sunday, June 29, 2025
Friday, June 27, 2025
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Technically speaking, the market wants to make a massive drop. Geopolitically, the market wants to make a massive drop. I say so because of the tariff mess (with continuous uncertainty), lack of signed trade deals/agreements and Middle East tensions. In addition, for the first time since 2022, the GDP for the first quarter was negative (thereby signaling a recession). Also, based on recent revisions for this year and next year, the Fed is forecasting much higher inflation, lower GDP/economic activity and higher unemployment rate (as a result of tariffs). At the moment, the effect of tariffs is yet to be seen in the economic data because many companies in anticipation of new or increased tariffs were front-loading their imports by importing goods ahead of the effective date of the tariffs to avoid the higher costs. But those goods can only last so long before more are needed at higher prices.
The reason I'm saying this is to point out that there isn't a justified reason why the market keeps going up when everything (technicals, fundamentals and uncertainty) is point to weakness not strength.
So why does the market keeps acting irrationally by going up when it should be going down?
The simple answer is Trump. If you have noticed, whenever the market starts dropping, he panics. He is too focused on the market. That is why the name TACO (Trump Always Chickens Out) is very appropriate for him because he cannot do anything avoid that name from sticking (though he really dislikes it) since he will continue to act like that given that he is too focused on the day to day movement of the market. Which also explains why he is always criticizing the Federal Reserve Chairman Jerome Powell about interest rates.
So when the market starts dropping, he reverses his position on issues or says something to manipulate the market up. Because of this, it is hard to short the market even in the face of bad news. Take for example the conflict between Israel and Iran. When it started, it would have caused a major drop in the market, but that didn't happen. Yet when the ceasefire was announced, the market went up on the news. So market participants are afraid of shorting the market. But when the market finally turns to the downside, we are going to see a massive selloff because folks will not be ready for it since they are using Trump as a backstop/insurance for any downside move. But that will fail because, given his impulsivity, the same Trump will unintentionally say or do something that the market just cannot ignore, and that he cannot reverse. But even if that doesn't happen, at some point, the market will be unable to ignore the negative impact of all I just pointed out.
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The reason I'm saying this is to point out that there isn't a justified reason why the market keeps going up when everything (technicals, fundamentals and uncertainty) is point to weakness not strength.
So why does the market keeps acting irrationally by going up when it should be going down?
The simple answer is Trump. If you have noticed, whenever the market starts dropping, he panics. He is too focused on the market. That is why the name TACO (Trump Always Chickens Out) is very appropriate for him because he cannot do anything avoid that name from sticking (though he really dislikes it) since he will continue to act like that given that he is too focused on the day to day movement of the market. Which also explains why he is always criticizing the Federal Reserve Chairman Jerome Powell about interest rates.
So when the market starts dropping, he reverses his position on issues or says something to manipulate the market up. Because of this, it is hard to short the market even in the face of bad news. Take for example the conflict between Israel and Iran. When it started, it would have caused a major drop in the market, but that didn't happen. Yet when the ceasefire was announced, the market went up on the news. So market participants are afraid of shorting the market. But when the market finally turns to the downside, we are going to see a massive selloff because folks will not be ready for it since they are using Trump as a backstop/insurance for any downside move. But that will fail because, given his impulsivity, the same Trump will unintentionally say or do something that the market just cannot ignore, and that he cannot reverse. But even if that doesn't happen, at some point, the market will be unable to ignore the negative impact of all I just pointed out.
SPX-DAILY
SPX-60MIN
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Thursday, June 26, 2025
Monday, June 16, 2025
Thursday, June 12, 2025
Sunday, June 8, 2025
Friday, June 6, 2025
Wednesday, June 4, 2025
Tuesday, June 3, 2025
Sunday, June 1, 2025
Friday, May 30, 2025
Monday, May 26, 2025
MARKET MANIPULATION FAILING?
Yesterday, President Trump announced that he delayed the 50% tariff on European Union to July 9 from the June 1 deadline after a call with Ursula von der Leyen, President of the European Commission.
The extension comes after Trump on Friday suggested a “straight 50% tariff” on the European Union because the 27-nation bloc “has been very difficult to deal with." And that “our discussions with them are going nowhere!”
What I want you to notice is that the market barely reacted when he mentioned the 50% tariff on the EU on Friday. Traders and investors have learned not to believe Trump. You can only cry wolf so many times before you are ignored.
The same thing happened on Thursday the 8th and Friday the 9th whereby, President Trump desperately kept trying to pump up the market just before Secretary of the Treasury Scott Bessent and Trade Representative Jamieson Greer were to meet with their counterparts from China in Switzerland for US-China trade talks on Saturday the 10th and Sunday the 11th. Trump kept saying people should "buy buy buy" because there was going to be a big trade news coming out of Switzerland even though the meeting was days away. In other words, US was set for capitulation.
For those two days (the 8th and 9th), the market was very quiet and did not react at all to what Trump was saying including the fact that he suggested that the tariff on China was going to be decreased from 145% to 80%. When that didn't have his desired effect on the market, Secretary of Commerce Howard Lutnick went on television on the 9th and said the tariff was going to be reduced to 34%. Still, the market ignored it. It wasn't until Monday the 12th that the market made a big gap up because the tariff on China was slashed from 145 to 30%! The reduction was so massive and unexpected that the market had to react. I believe the market reacted not only because it was a fact (after seeing the result of the meeting), but because China in a joint statement with the United States said the same thing.
The reason I'm writing this is to point out that I'm very happy traders and investors are coming to their senses and ignoring this noise and market manipulation. Just let the market move on its own weight. What Trump is doing is very annoying and frustrating to market participants like myself. That is why they are starting to ignore whatever he says unlike in the past.
So expect any "good news" from the EU-tariff-delay just announced to reverse right when the market opens on Tuesday. So if the market opens with a gap up on Tuesday (as it likely will), it is very likely going to be an Exhaustion Gap (gap up and drop).
Another reason I'm writing is to point out that, this tariff uncertainty will make it difficult for businesses and corporations to plan for the future with this ongoing and unpredictable changes in tariff rates imposed on imported goods. Even products made totally in the United States (without imported parts) will see elevated prices in order to dampen the effect on imported items through cost sharing, as a way to keep cost down on those imported items, or even to game the system. As a result, prices will increase on everything.
So we are heading into a stagflation period because there will be high inflation (prices will increase on everything) combined with low economic growth and high unemployment (businesses and corporations will avoid hiring and expanding because they can't plan due to uncertainty/fear of the unknown).
The extension comes after Trump on Friday suggested a “straight 50% tariff” on the European Union because the 27-nation bloc “has been very difficult to deal with." And that “our discussions with them are going nowhere!”
What I want you to notice is that the market barely reacted when he mentioned the 50% tariff on the EU on Friday. Traders and investors have learned not to believe Trump. You can only cry wolf so many times before you are ignored.
The same thing happened on Thursday the 8th and Friday the 9th whereby, President Trump desperately kept trying to pump up the market just before Secretary of the Treasury Scott Bessent and Trade Representative Jamieson Greer were to meet with their counterparts from China in Switzerland for US-China trade talks on Saturday the 10th and Sunday the 11th. Trump kept saying people should "buy buy buy" because there was going to be a big trade news coming out of Switzerland even though the meeting was days away. In other words, US was set for capitulation.
For those two days (the 8th and 9th), the market was very quiet and did not react at all to what Trump was saying including the fact that he suggested that the tariff on China was going to be decreased from 145% to 80%. When that didn't have his desired effect on the market, Secretary of Commerce Howard Lutnick went on television on the 9th and said the tariff was going to be reduced to 34%. Still, the market ignored it. It wasn't until Monday the 12th that the market made a big gap up because the tariff on China was slashed from 145 to 30%! The reduction was so massive and unexpected that the market had to react. I believe the market reacted not only because it was a fact (after seeing the result of the meeting), but because China in a joint statement with the United States said the same thing.
The reason I'm writing this is to point out that I'm very happy traders and investors are coming to their senses and ignoring this noise and market manipulation. Just let the market move on its own weight. What Trump is doing is very annoying and frustrating to market participants like myself. That is why they are starting to ignore whatever he says unlike in the past.
So expect any "good news" from the EU-tariff-delay just announced to reverse right when the market opens on Tuesday. So if the market opens with a gap up on Tuesday (as it likely will), it is very likely going to be an Exhaustion Gap (gap up and drop).
Another reason I'm writing is to point out that, this tariff uncertainty will make it difficult for businesses and corporations to plan for the future with this ongoing and unpredictable changes in tariff rates imposed on imported goods. Even products made totally in the United States (without imported parts) will see elevated prices in order to dampen the effect on imported items through cost sharing, as a way to keep cost down on those imported items, or even to game the system. As a result, prices will increase on everything.
So we are heading into a stagflation period because there will be high inflation (prices will increase on everything) combined with low economic growth and high unemployment (businesses and corporations will avoid hiring and expanding because they can't plan due to uncertainty/fear of the unknown).
Monday, May 19, 2025
SPX
All the charts look very bearish. Just needs a catalyst. I guess Moody's downgrade of U.S. credit rating wasn't good enough as a catalyst. But note that a bull trap/fake-out may be in play.
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