Editor's Note: D.R. Barton, Jr., is a regular contributor to our new Fast Profits video trading service. His last quick, 5-minute video showed viewers how to pull in 100%, 205%, and 53% in peak gains in no time flat. You can get this totally free service for yourself just by clicking here. (The next hot trade drops in just a few days.) Now, D.R. will give you the context you need to understand why these opportunities are so frequent right now…
Here are a few things markets don't like:
Geopolitical leadership that doesn't follow a logical path…
Uncertainty of any kind…
The prospect of contracting economies…
On Monday, we got truckloads of all three. And they all came from the trade war news headlines.
The effect was self-reinforcing – and profound.
There was no shortage of illogical geopolitical leadership on display: The U.S. and Chinese presidents (with some European Union officials thrown into the fray for good measure) exchanged barbs about tariffs that sounded more like pregame locker-room posturing than international statesmanship.
And, as we've seen, when emotion enters the process, traders and investors get worried that it could add to the uncertainty.
And one pithy quote sums up the uncertainty the markets felt yesterday.
The Wall Street Journal reported a quote from President Xi Jinping of China: "In the West, you have the notion that if somebody hits you on the left cheek, you turn the other cheek," Xi said in the report, according to people briefed on his remarks. "In our culture, we punch back."
A biblical analogy: Check.
Open-ended, ominous threat: Check.
That's the height of uncertainty.
Of course, at the root of all this is the prospect of contracting economies. That's the ultimate goal of a trade war, after all – to do such damage to the "other guy's" economy that they blink first.
If tariffs stick (and tens of billions of dollars' worth are already in force), we'll see the real economic slowdown. Goods will become more expensive for consumers, so they'll buy less of them. Pretty simple stuff from that perspective.
And so, with that triumvirate of market-rocking news, the major U.S. indexes had their biggest down day since…
…The last tariff tantrum on May 29th.
So the big question before every investor this week is: Is this all coincidence? Or is the "Trump growth" narrative asserting its dominance?
I think it's the latter, and I'll show you why that's important with a few charts here…
Join the conversation. Click here to jump to comments…
About the Author
Nationally recognized technical trader. Background in engineering, system designs, and risk reduction. 26 years in the markets.
Do you need experience trading options to get an account which will allow you to make these trades? I was refused such an account by Schwab because I lacked the requisite experience.