“Buy the rumor, sell the news.” It’s an old Wall Street saying you’ve probably heard a million times.
But now that it’s Tariff Day, should you do the OPPOSITE? Is it time to BUY the news?
Think about it: We’ve been selling the rumor of higher tariffs and a worsening trade war for weeks. Ever since the markets peaked in February, the averages got smacked hard enough to push the S&P 500 into an “official” correction – down 10% from its peak. Many of the highest-flying Artificial Intelligence (AI) and related stocks fared even worse. Even the Roundhill Magnificent Seven ETF (MAGS) is now down around 14% on the year.
But look at the MoneyShow Chart of the Day here. It shows the SPDR S&P 500 ETF (SPY). We had a high-volume selloff in February and March. Then we had a re-test on Monday…and it was successful (for now at least). Specifically, we tagged the previous low, then mounted a high-volume reversal to the upside -- and recorded a slightly higher low in RSI.
SPY: Is This the START of a Bottoming Process?
Data by YCharts
I recently wrote about what a bottoming process MIGHT look like. And you know what? The action over the last few days looks kind of like that.
It’s only a START. Maybe President Trump’s tariff plans will be so aggressive, the short-term technical action won’t matter and we’ll just give up the ghost. But maybe...just maybe…the best play is to BUY the news here!
