Will Trump do a deal with China or not? The Chinese have already put out their terms in their media outlets. We’ll know in the less than 48 hours and maybe even today if Trump will agree to a trade war truce or walk away. It seemed completely logical to assume that some sort of deal – if not a simple trade war truce – was in the cards for this week back in August, but many things have happened since then to shuffle the domestic political calculus. Things are no longer so simple with the political situation in the US turning chaotic in recent weeks.
I hope we will get a deal from China and Trump. If we do expect the stock market to rally and hold up into Thanksgiving and Christmas. And stock market bulls would take a simple trade truce as a deal. If there is no deal look for gold to come alive quicker than it would have otherwise.
If there is no deal though the stock market averages will also be in danger of breaking through support and beginning a decline like they did last Fall.
All three market averages have bounced three times this year on or above their 200-day moving averages. A close below that key support level will be a major technical signal that a top is in. That’s now 2848 on the S&P 500.
That doesn’t mean that the stock market will just crash if it were to break support here. Money will shift into defensive sectors and gold and silver will benefit. The stock market will also have its bounces as things play out.
Navigating the situation though will require new tactics to win. We’ll see what happens. A deal will mean things can stay the way that they have been in the markets the past few months for the next few months.
But if the situation changes I will adapt and put out an entire game plan this weekend for private Power Investor members. Winning in the markets is about being prepared. And then you can be calm and ready for whatever comes with the game.
I talked about the possibility of a trade debacle on Tuesday on the Jim Goddard show in an interview you can listen to here – in it I said why Trump could decide to walk away from a China trade truce and abandon the stock market to make a new even political smash mouth turn. No one wanted to consider the unthinkable in the TV financial media, but we did and so we are ready no matter what comes today:
-Mike Swanson
