Trade Wars are Easy to Win (We Hope)

Last week Trump threatened to triple down on China with even more tariffs if they didn’t come to the table for a trade discussion.

Meanwhile, the politics of the day have the country so split along partisan lines, there may be very little political advantage to Trump to deviate from this position.  So the game of economic chicken continues, and we may get to test the theory about how whether or not trade wars are easy to win.

Naturally, this has the market spooked a little bit.  But so far this isn’t enough to trigger a pull-back.  It’s just enough to arrest the climb higher.  So basically, it looks like a set-up to repeat similar price movements from last week.  The SPX 2872 level is still the key support area.  A failure here drops support down to the 2850 level.  As far as resistance goes, the first area will be around 2900 (or a few points higher).

So basically, September is shaping up as a consolidation month so far.  No one seems ready to call this thing over because the underlying economic data — and relative pricing of stocks (not to themselves, but compared with assets like bonds) still seem okay.  But the prospects (or at least media rhetoric) about trade wars and economic boogie men keeps things from moving substantially higher too.

For the week, the SPX appears neither over-bought nor over-sold.  So we’ll need to keep an eye on things to see if how the market resolves.  The big-picture trend remains positive, but there are no guarantees of anything heading into an election cycle.

<sorry, charts are down this morning.  Will try to get this updated soon>


Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.