Cringe and Bear It…
“Train yourself to let go of everything you fear to lose.” – Yoda
Just in case you were wondering, this has been a relatively lengthy trade range for a vast portion of the market.
At the time of writing the NYSE was down 1.1% since May 14, 2018.
We started the year off suggesting we were the equivalent of mid-summer or so 1981 on the demographic wave.
So far, so good.
Back then the market was choppy and directionless as well…until the following year.
It’s tough to watch lengthy trade ranges but note that since Q3-ish 2017, we have witnessed the NYSE stay pretty much within a 1500-point range; with the only real peek outside that range being the excitement at the start of 2018 and the panic at the end of it.
Based on current readings of the Fear and Greed data above, we’ve seen nearly the same level of fear created from the recent 1500-point drop since last Monday on the China Trade tweets as we saw during the roughly 4,000-point cliff dive of Q4 - an entire 100 or so days ago.
Cringe and bear it, folks.
This is all good news.
The key element from the bullet points (above) to consider is that $1.2 Trillion in values for US stocks has been removed from the board.
And I have a little secret for you; we don't send much to China each year. Most of the stuff we import from China is the end result of what we send them to get manufactured.
And that will change sooner than we think.
So, why do I point this out?
Well, assume for a moment that Trump tacks on that ugly max 25% tariff on every single dollar of goods coming in from China.
That tallies to about $125 Billion a year (365 days) in tariffs, spread over a measly little $21 Trillion economy.
In other words: In the last 6 days of panic, fear-driven, tweet responding lunacy, we have erased 10 years (roughly 3,650 days) worth of those tariffs.
A decade worth folks, in 6 days.
Think about it.