I was talking about the dead cat bounce, the rally to 2800 in the S&P 500. This is a bear market and in a bear market good news provides an opportunity to go short. The good news came from China, trade talks between US and China are going well according to president Trump. This is why the S&P is rallying. But it’s a dead cat bounce. The S&P 500 could go a bit higher from current levels, but not above 2800, this market is going down soon.
You see, when Trump sees the S&P too low he will try to boost it. Each time he tries you sell, because his policy will fail. Look at the tax cuts, twelve months ago the markets were surging on the tax cuts. That was a massive bull trap. Then Trump decided to impose tariffs on Chinese goods, the idea was to create jobs and economic expansion in the US. But markets tanked, a trade war will hit US corporations.
Naturally Trump is not going to let the S&P 500 collapse so he changed his mind about the tariffs. Suddenly he has become more conciliatory with China, typical Trump behaviour, he will do everything possible to boost the stock market. That will fail too.
I have learned to profit from Trump’s actions, when he boost the stock market a massive decline follows. Get ready for the next one, it’s coming soon.
The FTSE 100 is following the S&P 500 higher, but not for long, when the S&P collapses it will drag the FTSE to new lows.
Trump has been instrumental is activating the bear market and we are just at the beginning…
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