Trump’s Twitter Terror
![](https://cdn-images-1.medium.com/max/550/1*ljoTsgftmus7bxv2xJx6zw.jpeg)
Once again, in less than one month, the market lost its collective mind when Trump did what Trump has always done — make bizarre comments on Twitter. Below is the 5-min chart from Friday August 23, 2019…
![](https://cdn-images-1.medium.com/max/640/0*kugQo07asdFGJyZr.png)
…and the next chart is from three weeks earlier.. .
![](https://cdn-images-1.medium.com/max/640/0*yDGOSovIDOwbiT4S.png)
At least the market is consistent. Trump’s Tweet did not change any aspect of reality at 1:30 p.m. on August 1st, or at 11:00 a.m. on August 23rd, yet participants decided that $600B should be withdrawn from the market. Nothing changed, except for the price of the SPX.
Even the August 23rd after-hours Tweet announcing increased tariffs in retaliation for the Chinese retaliatory tariffs, changed nothing. US imports from China were $557.9 billion or 2.7% of GDP. Trump Tweeted that he was increasing the tariffs by a further 5%. What does that mean relative to GDP? It means nothing; 5% of 2.7%, is an increase of 0.135% of GDP or $29.7B. Let this sink in…. The market removed $600B of value from the SPX in a matter of hours, because it will cost $29.7B more in tariffs to import a year’s worth of Chinese goods.
It took three-days to recover back to where the market was before the August 23rd Tweet (chart below).
![](https://cdn-images-1.medium.com/max/990/0*0lWPLLKfkr_AtfPR.png)
But the chart below shows that the market has yet to recover from Trump’s August 1st Tweet.
![](https://cdn-images-1.medium.com/max/990/0*_LAu4w13CKaaVcL-.png)
At ANG Traders, our working hypothesis is that there are only two consistent market drivers: fear — fear of losing, and fear of missing out (greed): and Federal government fund flows. News, whether financial or political, can “jiggle” the market, but does not drive it, and that includes Trump’s Twitter terror. Investor fear is at levels that correlate to market bottoms, not market tops, and the Federal government is about to dump $1.2 trillion into the economy. The market will recover from the August 1st Tweet, just like the market recovered from the August 23rd Tweet. Buy-the-dip.
Join us at angtraders.com and let us keep you away from the herd.
Source Nicholas Gomez