The big bounce from "tariff pause" recovered the 2-day dump. Now what? 1. Earnings Guidance... Earnings season starting. The key to the market rally from here, if any, will be what companies see for the rest of this year and perhaps 2026. (Earnings beats for last quarter may not mean much. They are a reflection of the past. Guidance is a vision of the future. That's what stock investors care about most.) 2. Interest rates... JPow has expressed he sees inflation as "sticky" and may not be in a hurry to cut rates soon. CPI out today... probably not good for rates if it comes in a bit on the hot side like it has been lately. FWIW...
If the cycle repeats again and again and again for the next 4 years, it will be the trader from elitetrader.com's dream and investor from eliteinvestor's nightmare.
I don't know, I think it could be a bull trap. I think part of the reason for the big bounce was the bulls have been waiting on the sidelines for so long. But keep in mind, this is only a 90 day stall period that doesn't really change anything. And all it takes if for Trump to say something negative again and we are back to where we were. So I'm sitting on the sidelines right now with all bags full. Tempted to short, but going to wait to see what the market does.
Yesterday's bounce had nothing to do with bulls waiting to buy. It was a classic case of short covering. And as in most every case of massive short covering, the next day brings a new reality. The market won't be safe to buy long-term until economic reports resulting from this debacle have bottomed and begin to show improvement.
10% tariff remains, allowing for for lower taxes. Companies are being forced to find China alternatives. Bull market, if in 90 days the tax cuts become a reality and the Doge cuts are allowed.
tariffs lower your taxes in the following way: when you lose your job from the recession, you pay less in taxes. And since you have no money to consume, you don't even pay the tariff tax.