Buy the blood!

 There is a lot of blood on the Street now! As a trader, this is the best time to buy when the bloody street is full of fears😋😜

This is exactly what I'm doing these days when the market making new lows seemingly everyday. But at this level and condition, it is inevitable to see a violent rebound at any moment. Actually in the past year or so when we saw similar extreme fear and extreme oversold conditions, SPX jumped 300-400 point within a week or two. That's kind of rally I'm looking for! 

Technically the best thing traders can expect is to see a big gap down below a major support and then climbing up and closing above the support. This is exactly what the market has done today: SPX was smacked down all the way to about 5666ish but closed well above its critical 200 DMA around 5730ish. A V shape rally is coming!

Here is the quote best describing why it is a great time to buy:

 

 

Here is the rationale why tariffs will not cause inflation

 

The Truth About Tariffs

People love to panic about tariffs causing inflation.

They wave around the ghost of the Smoot-Hawley Tariff from the Great Depression like it’s Exhibit A proving tariffs equal economic collapse.

But let me pop this myth:

Tariffs don’t cause inflation. And no, I'm not crazy (despite what angry professors from Harvard or Stanford might tweet at me).

Here's the deal.

Inflation isn’t when just a couple of things become pricier. It’s when your entire shopping basket—eggs, shirts, Netflix subscriptions, bananas, everything—starts costing more because your money’s worth less.

Inflation means your dollars aren’t stretching as far as they used to.

Take the 1800s.

For nearly a century, 97% of America’s revenue came from tariffs. Income tax? Didn’t exist. And guess what inflation was? Basically zero. Maybe 1% a year.

The economy was booming, and tariffs funded nearly everything. So, why do people suddenly think tariffs cause inflation today?

Tariffs are taxes on imports, yes, but prices are set by supply and demand—not tariffs.

Let me give you a simple example.

Imagine fancy potato chips from Canada cost $10, and a 20% tariff pushes that to $12. Everyone panics—prices rose! Inflation!

Nope.

If I only have $100 to spend and the price of my favorite chips goes up, I either stop buying chips or I buy, say, fewer newspapers.

If everyone stops buying newspapers because they’re overspending on chips, newspapers lower their prices or go out of business.

Overall spending stays the same, and inflation doesn’t budge.

Three quick scenarios:

1. We buy pricier chips, but fewer other things: Inflation unchanged.
2. Manufacturers shift to the U.S. to avoid tariffs: Inflation unchanged (and more jobs here).
3. We stop buying fancy chips: Prices drop again. Inflation? Still unchanged.

The only thing that actually causes inflation is printing money.

Between 2020 and 2022 alone, 40% of all money ever created in history appeared overnight.

That’s why inflation shot up afterward—not because of tariffs.

Back to tariffs today.

Still No Inflation

Unlike the infamous Smoot-Hawley blanket tariff (imagine Oprah handing out tariffs: "You get a tariff, and you get a tariff!"), today's tariffs are strategic.

Trump slapped tariffs on chips from Taiwan because we shouldn’t rely on a single foreign supplier for vital tech components—especially if that supplier might get invaded.

Now Taiwan Semiconductor is investing $100 billion in American manufacturing.

Strategic win, no inflation.

Then there’s Canada and Mexico—our friendly neighbors with weirdly huge tariffs on things like milk and butter (299% tariff on butter—really, Canada?).

Trump’s not blanketing everything with tariffs; he’s pressuring trade partners to lower theirs.

If they do, everybody wins. If they don’t, well, then we have a strategic trade chess game—but still no inflation.

In short, tariffs are about strategy, security, and fairness—not inflation.

Yes, blanket tariffs from the Great Depression era were dumb. Obviously. Today's targeted tariffs? Smart.

 James Altucher