The Savagery Of The U.S. / China Tariff Wars

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 11 out of 11 markets closed lower: Shanghai Comp -1.17%, Hang Seng -1.91%, Nikkei -2.17%
• In Europe 9 out of 13 markets are trading higher: CAC +0.73%, DAX +0.49%, FTSE -0.47%
• Fair Value: S&P +0.04, NASDAQ +5.19, Dow -10.68
• Total Volume: 2.83 million ESU & 497 SPU traded in the pit

_{*As of 7:00 a.m. CST}

Today’s Economic Calendar:

Today’s economic calendar includes Durable Goods Orders 8:30 AM ET, Chicago Fed National Activity Index 8:30 AM ET, and the Dallas Fed Mfg Survey 10:30 AM ET.

S&P 500 Futures: Trump Dump

Chart courtesy of Scott Redler @RedDogT3 – Loose/wide violent candles within a range set in motion buy erratic tweets can definitely be hard to handle for traders both ways. Take care & take trades. $spx chart.

Thursday nights Globex session was quiet, that is until China announced $75 billion in new tariffs on U.S. goods, including autos. The S&P 500 futures dropped 34 handles from its high at 2936.75 to print an overnight low at 2902.50 after the headlines hit the tape.

From there, the ESU went on to open Friday’s regular trading hours (RTH) at 2909.50, and caught a bid when headlines out of the Jackson Hole Summit quoted fed chair Jerome Powell saying that the economy is in a good place, and that the fed will continue to act appropriately.

The futures regained nearly all of the early losses after the fed headlines, and things were starting to look good. What came next, I dare say, very few people anticipated…

At 10:00 CT President Trump went to work on a series of tweets that would send stocks into a tailspin. He blasted China, he blasted the fed, he demanded that American companies come back home, then he raised tariffs on chinese goods.

Needless to say, panic ensued, and when it was all over, the stock market took the brunt of the attack. The S&P 500 futures closed down -2.28%, the Dow Jones futures closed down -2.11%, the Nasdaq 100 futures closed down -2.68%, and the Russell 2000 futures took the biggest hit, closing down -2.92%.

The hits just kept coming, the selling was relentless, volume was heavy, and if you look at the open interest in the S&P, you’ll see a lot of new short positions have entered the market. Was Friday’s move just a shakeout, or are we heading into correction territory?

It’s easy to say the market will do whatever screws the most people, we saw that Friday, but trying to pick the winning side going forward is going to separate even more people from their hard earned money.

SIGN UP HERE TO GET THE FULL MRTOPSTEP OPENING PRINT!

As always, please use protective buy and sell stops when trading futures and options.

_{Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.}