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Opinion: How to trade stocks as Trump threatens China with new tariffs

johnNjohnN
in Fund Discussions
https://www.marketwatch.com/story/how-to-trade-stocks-as-trump-threatens-china-with-new-tariffs-2019-05-06

Opinion: How to trade stocks as Trump threatens China with new tariffs
By Nigam Arora

Published: May 7, 2019 10:04 a.m. ET
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The S&P 500 Index has five new support zones
Reuters
President Donald Trump

A question for investors today is how they want to react to President Trump threatening to put more tariffs on Chinese goods.

Let’s explore the issue with the help of a chart.
Chart

Please click here for an annotated chart of ETF S&P 500 ETF SPY, -0.35% which represents the S&P 500 Index SPX, -1.65% Please note the following:

• The Chinese are notorious for dragging out negotiations to get the best deal. Irrespective of your political leanings, Trump’s latest move seems to be in the long-term best interest of the U.S. and the stock market.

• The short term for the stock market is a different story.

• The chart shows five support zones. These support zones are based on a number of factors that have proven to be accurate in the past including how algorithms tend to trade as well as money flows.

• The chart shows the target zone for a potentially explosive rally on a short squeeze. If it turns out that there is a good trade deal soon, those who are short-selling now will be forced to cover at much higher prices.

• Expect stocks that are dependent on China to be affected more. These include Apple AAPL, -0.33% Starbucks SBUX, -0.13% Nike NKE, -1.23% and Yum China YUMC, -0.62% Expect less impact on Google GOOG, -1.29% GOOGL, -1.22% Amazon AMZN, -0.39% and Facebook FB, -0.25% Microsoft MSFT, -0.35% and semiconductor stocks such as Intel INTC, -0.04% AMD AMD, -0.98% and Micron Technology MU, -1.07% may be adversely affected.

• Expect Chinese stocks such as Alibaba BABA, -0.57% and JD.com JD, -1.00% to be adversely affected.

Comments

  • hank
    edited May 2019
    Ummm ... Not really doing much trading. But I see plenty of chaos already. Sure to increase as “election” nears.

    Anybody got any good ideas what to buy?

    ..... Maybe booze, gold, an airline ticket somewhere?
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