Be careful what you wish for. How many times have we watched the market or maybe Nvidia flying 🪽 and wished we could go back in time to hitch a ride? When the market comes crashing down, with Magnificent 7 leading the way down, how many of us actually buy it? If you did, have you actually scooped up some bargains, or are you catching the falling 🔪?
No doubt many of us would ask the same question as we navigate the markets in these volatile times.
Early false dawn appeared in last night's US session. Did you buy or sell anything? Today, the whole world's major markets staged a concerted rebound! So is this real? Or a falling 🔪?
A bounce in the US market is definitely here! Numbers don't lie. We can see that in the charts below. RSIs are all in extremely oversold positions, which is expected in a panicky condition. The question is, if this bounce is sustainable? Quick answer is no.
At least from a TA perspective, none of the three US indices are showing enough power to be capable of going above the uptrend line (see line in purple 🟣). They don't even come close. Having said that, it's always possible to do so, but as time progresses, the target line will get further and further away.
From a practical perspective, it's still a no. Donald Trump is used to being a bully. He won't care less of the welfare of Americans. It's all about him... He is merely showing off... If the world 🌎 gives in to his tariff scheme, you can be sure he will find other means to extort more money 💰🤑! Remember when I was young, mum will always remind me to stand up to the school's bully. If I give in, they are sure to extort money day-in day-out. We are in this situation.
The leadership of China won't stand for it, as giving in is a sign of weakness and face-losing situation. To many Chinese, face=pride. No leader wanted to appear weak in front of their citizens. Otherwise they might lose their long term support (not that they really need it, but it's better to have trust than disgruntled citizens).
So are we going sit out the whole episode till the dust settles?
Not me...
What I do is nibble at the companies or equities that I am willing to hold through the years. But no magnificent 7 for me! To me, they are still overvalued especially if the trade wars persist. During the panicked days, I bought more silver $ProShares Ultra Silver(AGQ)$
Why?
China is not going to give in to US's bullying. If US retaliates against China's retaliation, I am betting on China to expand its export restrictions to include more minerals, such as more rare earth minerals and antimony. That's right! That's where those miners come from (Sun Silver mine contains gold, silver and antimony), so I grab while they are down.
Be very careful out there... don't fight the trend, but don't be afraid to take profit and nibble at what you like at a reasonable price... Make sure to take the effect of tariff war into account.
Give a hint, if China is to turn off the tap for a prolonged period, what do you think will happen to $NVIDIA(NVDA)$ when it runs out of rare earth supply? Trade with your eyes open!
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