VRA Investment Letter: Trumps Bear Market Trade War. My Video That Explains It All. Yes, We Have a Game Plan.
/Good Friday morning. Just 5 weeks ago I was repeating my statement of the last two years; “this is the most bullish I’ve been in my career.” That set-up no longer exists, as the bears now have control of the market. As we covered in yesterday afternoon’s VRA Letter (as we were selling multiple positions), this is the very last thing we thought we would be doing. At this point, Trumps tariff execution looks to be the financial equivalent of operation warp speed (without the Fed bailing out the economy/markets..as of now).
Trump could help to change things with a single statement; that he is reversing his hardline position on tariffs. Does anyone think that he can do that and save face? Especially as countries like China are now threatening their own steep, additional tariffs after Trumps tariffs go into effect on April 9? There’s no longer a debate; this is a global trade war. Until we have a capitulation event, with the VIX and put/call ratios hitting highly elevated levels, it will be difficult for the market to find its footing. Today’s close and Monday mornings open could give us that kind of near term capitulation event.
If you haven’t watched my video podcast from yesterday, here it is again. 15 minutes that explains why we sold and what we expect next, as we prepare to implement our bear market trading strategy.
https://vraletter.com/podcast/vra-investing-podcast-tariffs-gone-wild-the-vras-strategic-response-kip-herriage-april-03-2025/
We have a game plan for this, just as we did from 2007-2009, as we were positioned for both the financial crisis and the March 2009 bottom that followed. Again, should Trump reverse course quickly, this bear market trading approach may not be fully necessary. If not, Trumps enemies have him where they want him. They couldn’t take Trump out with rigged elections, lawfare or assassination attempts. Now, with a simple tip of the financial markets (that they control), his enemies have the opportunity to damage him via stock market/economic turmoil. The irony here is that it’s Trump himself that's opened the door for his enemies, as Trump supporters are being hit the hardest. Perverse, nauseating.
VRA Bottom Line: Going forward we will be trading both sides of the market. Over the weekend Tyler and I will walk you through it.
Until next time, thanks again for reading…
Kip
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