الثلاثاء، 4 مارس 2025

Tariffs, Tech, and Tactical Moves

March 04, 2025 | Read Online

Don Kaufman here.

And oh boy, what a day it's been in the wild, wild west of the financial markets.

If you thought Monday's sell-off was a gut-wrencher, Tuesday just brought us another round of volatility that had traders biting their nails and investors asking, "What next?"

Let's break it down, make sense of the madness, and most importantly, figure out how to navigate this environment with a little bit of strategy, a whole lot of smarts, and maybe even some fun along the way.

Tariffs Gone Wild: The Trade War Strikes Again

So, what's the deal?

The U.S. just unleashed a 25% tariff barrage on Canada and Mexico, with China getting a 10% slap on the wrist. Naturally, the global economy didn't take kindly to this. Retaliation is the name of the game, with China, Mexico, and Canada firing back with levies of their own.

The market reaction?

Well, it was classic risk-off panic. The Dow dropped over 840 points at its session low, and the S&P 500 flirted with a 2% intraday decline before clawing back some losses. Even the Nasdaq, which tried to play superhero thanks to Nvidia and Alphabet gains, barely stayed in the green.

Here's the kicker: These tariffs are a double-edged sword. On one hand, they're a negotiation tactic—a "Trump card," if you will. On the other, they're a direct hit to corporate America's bottom line.

Companies like GM, Ford, and Chipotle, heavily reliant on global supply chains, are getting whacked. And that's not even touching on the inflation risks creeping in.

Tech to the Rescue? Nvidia and the Nasdaq Shine

Now let's talk about the bright spot, because even on the darkest trading days, there's always a little sunshine.

Nvidia—our darling tech stock—popped 3% today, dragging the Nasdaq Composite out of the red and into positive territory.

Why? Likely a combination of bargain hunting and the classic dip-buying mentality that keeps tech traders alive.

But let me be clear: Nvidia's still down over 12% year-to-date, and this week's decline is a reminder that no stock is immune to the macroeconomic storm.

Alphabet also lent a helping hand, but one or two strong performers aren't enough to offset the broader market weakness.

If you're leaning into tech right now, you've got to be tactical. Look for those high-growth names that have already taken a beating but still have strong fundamentals.

This isn't about catching a falling knife—it's about finding the knife that's already hit the floor and has a handle worth grabbing.

The Market's Mood: Fear First, Questions Later

There's an old saying on Wall Street: "Sell first, ask questions later." That's exactly what we're seeing this week.

The tariffs, combined with soft economic data, have traders running for the hills. Bank stocks? Down. Retail stocks? Down. Small caps? You guessed it—down.

Even the S&P 500 is now trading below its post-election levels, which is a big psychological blow for investors who were riding the "Trump trade" wave.

And with the President addressing Congress tonight, you better believe the market will hang on every word. Will he double down on tariffs? Offer an olive branch? Either way, volatility is here to stay.

Actionable Takeaways: What's a Trader to Do?

Alright, let's get to what you really came here for—actionable insights. How do you trade this mess? How do you invest in a market that's behaving like a rollercoaster with no brakes?

1. Defensive Sectors Are Your Friends

Morgan Stanley's Monica Guerra nailed it: in times of uncertainty, you go defensive. Utilities, real estate, consumer staples—these are the sectors that hold up when the rest of the market is losing its mind. They're not sexy, but they're stable.

2. Watch the ES Futures at 5911

Right now, ES futures are trading at 5845, well below the critical 5911 level. Why is 5911 so important? Because it represents the gateway back into the volatility box—a range where the market has seen significant two-sided action in recent sessions.

Think of it as the zone where buyers and sellers have battled it out, and it's a level traders use to gauge whether the market is stabilizing or spiraling further into bearish territory.

If ES futures can rally back to 5911 and hold above it, we'd be back inside the range where volatility can work both ways, giving traders more opportunities for short-term setups.

But if the market continues to struggle below 5911, it signals that sellers remain firmly in control, and the next leg down could be just around the corner.

This level is critical because it's tied to market memory—a zone where heavy volume and past price action have created a clear line between bullish and bearish sentiment.

For now, 5911 isn't just resistance; it's the market's beacon of hope for a recovery. Until then, the market remains vulnerable to further downside.

3. Fade the Panic, But Don't Go All In

This is not the time to be a hero.

Yes, there are opportunities in beaten-down names, but you've got to manage your risk. Use options to control your exposure—think defined-risk trades like vertical spreads or iron condors.

This market is too unpredictable to go all-in on any single trade.

4. Stay Nimble, Stay Informed

This is a trader's market, plain and simple. Long-term investors are feeling the pain, but short-term traders are thriving on the volatility.

Stay nimble, keep your stops tight, and don't get married to any one position. And hey, keep an eye on the headlines—this trade war saga is far from over.

The Game Plan Moving Forward

Let's face it: This isn't your grandma's stock market anymore.

Between tariffs, inflation risks, and an unpredictable geopolitical landscape, the only constant right now is uncertainty. But here's the thing—uncertainty creates opportunity.

Whether you're a seasoned trader or a market newbie, the key is to stay disciplined, stay informed, and most importantly, stay calm.

The market loves to shake out the weak hands before rewarding the patient and strategic players. So take a deep breath, stick to your game plan, and let's crush it out there.

To your success,

Don Kaufman

P.S. If you want to know exactly how I'm playing this market, join me on Thursday at 2 PM ET, for a special LIVE broadcast, where I'll be revealing how I've been able to snatch profits, even in this wild market. Click here to RSVP.

In This Market Chaos, Opportunity Strikes Fast. Are You Ready?

While the markets seem to spiral out of control—tariffs, inflation risks, and relentless volatility—we stay focused on one thing: these 24-Hour Profit Windows.

And it's paying off, again and again: