Tariffs & Trade Wars

By now, tariffs and trade wars are household words globally, as our newly elected US president has launched an unprecedented trade war against her global trading partners.

Of all the tariff impositions, the one which will affect us the most as investors is chips. Semi conductors.

AI was the household word just a few months ago, and AI stocks soared to dizzying heights.

As we know, the tech sector leads the broad market and semi conductors leads the tech sector.

The charts confirm that.

QQQ – the config has just turned bearish this month.

For newcomers, our trading model is based on the 50/200ema.

• When 50ema is above 200ema, config is bullish and the best time to buy is when prices are at or near the 200ema upon a correction.
• When 50ema is below 200ema, config is bearish and the best time to sell short is when prices are at or near the 200ema upon a bounce.

SMH – config turned bearish in March, a month ahead of QQQ.

Yes, chips leads the tech sector.

SMH monthly chart.

TLBSS at the end of March, a long term sell signal.

QQQ remained on TLBBS at end of March.

SMH leads QQQ.

NVDA – the global giant in chips and AI industry.

A long term sell signal at end of March.

Our benchmark $SPX also remained on TLBBS at end of March.

Will we see a TLBSS (long term sell signal) at the end of April?

Summary

As the charts clearly show, semi conductors is leading the tech sector into a new bear market.

Will the broad market follow? We will know in a few days.

Is the trade war just a smoke screen for what really matters to the US administration?

Tariffs imposed upon one another can be and will be negotiated, increased, decreased, or even removed.

These news events will no doubt influence the markets and result in sharp volatility for the near future.

But the most important issue is the control of production of semi conductors.

The rest is just noise.

Do not be tariffied.

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