"Buy, buy, buy" or "sell it all" - what to expect in the chaos of the trade war

The complex trade negotiations between the US and China and the wide range of opportunities to get out of the situation threaten the already fragile confidence in investors. According to Peter Tchir, chief strategist at Academy Securities, traders and investors need to look for any news or rumors about the talks.

According to Tchir, traders should be careful about all the announcements that describe the key aspects of the deal that will push the shares upwards before the rally gets lost and down.

"Everyone wants to" sell the news "that has a deal." - says Tchir. So he formulates four recommendations and possible scenarios for investors to prepare for.

Negotiations between the US and China are failing

• The shares are sold out first
• The S & P500 will go back to 2400

A bargain has been achieved with a relatively well-defined frame

• Expect a short-term rise in the markets
• Upward movement may not be able to withstand the day before the seller's pressure is followed

The US is blocking the "steel" tariffs against Mexico and Canada

• Buy, buy, buy!
• It will be a clear sign that the Administration has changed its view of trade as a whole
• It can unleash a new trading era at low tariffs and trade barriers
• The S & P500 can go up to 3000 at best

The US is raising its rhetoric over Europe's and Japan's automotive tariffs

• Sell, sell, sell!
• It will be seen as a clear signal that the US will not succeed its success with China and the S & P500
• may fall below 2400
• "Changing a trade war with another will not help"

Източник: Bloomberg Finance L.P.

Графики: Used with permission of Bloomberg Finance L.P.

Read more:

• Risk off after the escalation in the Middle East, markets are recovering in a period of calm
• The macroeconomic events for today’s trading calendar
• The US government has confirmed the attacks, Trump is calling an emergency staff meeting
• Has the war between Iran and the US started?
• US markets remain under pressure, traders await Iran’s response