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Saturday, June 23, 2018

Trade Threat Peak This Week? Bullish

The initial $50B of tariffs that the US issued on Chinese goods was quickly answered by China with their own set of $50B of targeted tariffs.

What's more interesting however is that the US' latest threats of an additional $200B of tariffs have so far gone unanswered.

That is meaningful.

Cooler Heads?

President Trump's negotiating tactics have been far from meeting traditional political protocol. Such a strategy worked to calm North Korea and may have settled China from upping the ante on trade tariffs.

China sits on a debt problem of their own. As tough as China talks they'd prefer to avoid an economic slowdown.

Negative Trade News Peak Behind Us?

We may be in the peak part of the tariff threats. If China can't answer the $200B threat then hopefully the largest negative news hit is behind us.

Both countries are apparently racing to negotiate a trade accord ahead of month's end.

So either we have a peak in the negative trade news cycle or the US and China could even come to terms some time in the next week. Both would be bullish for markets that sustained a tough weak following a cross fire of trade threats.

Tech And Trade

We pointed out that thus far tech companies' goods have been mentioned far less in items listed for tariffs.

We also think we have increasing confirmation we are early in a tech boom. As long as trade tensions don't escalate to much we think many tech stocks have big upside from here.


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We are long QQQ.

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