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August 5, 2018 | Odds Improving for a Deal with China

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

We are going to find out soon whether Mr. Art of the Deal can bring China around on trade issues. It’s encouraging that Trump has already turned what had begun to look like a full-blown trade war with Europe into a success story for global business. However, it remains to be seen whether he can extract concessions from the hardball players in Beijing.  For the time being, the news media have ratcheted down their Trump Derangement Syndrome sufficiently to  report more honestly on what incorrigible scumbags the Chinese are in all things having to do with trade. We are dealing with one of the most corrupt governments on Earth, after all, and it is hardly unreasonable for Trump to demand that they show some respect for, at the very least, intellectual property rights.

The Next Big Rally

His odds of success have taken a turn toward the better recently with the run on China’s currency and stock market.  Bears have been piling up bets against both, and it’s only a matter of time before the government is forced to do something about it. Up till now, official policy has been to allow the currency to drift lower in order to compensate for the effects of higher tariffs on Chinese goods. This strategy cannot work over the long haul, however, because Trump can raise tariffs much quicker than China can devalue its currency.  Bottom line: Look for China to blink first.  If and when this happens, it’s going to kick the U.S. stock market into a huge rally.

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August 5th, 2018

Posted In: Rick's Picks

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