Yes we survived one potential catastrophe from FED but Trump makes sure we have another coming. His tariffs on China sparked enormous fear on Chinese retaliation and we sold off heavily.

With tariffs, we are in fact cutting a tree branch underneath ourselves. It will not help the US. It didn’t in the past and it will not help today either.

When a selloff like this happens and you get caught with trades now against you you the best thing you can do is wait it out. Do not trade it do not adjust trades unless you must (for example expiration is near). Wait and do nothing. When all this settles the trade will improve and most likely you will be rolling at a better situation.

 

Of course there may be situations when the trade won’t improve and you will be rolling from a lot worse position. But selling an opposite trade can help you rolling the trades and lower losses.

Today, Trump announced his plan on trade tariffs on $60 million goods imported from China. He thinks that it would help local businesses despite the fact that the same businesses already warned Trump that in the end it will actually hurt them. And it will hurt consumers.

Do you need examples? Just go to history. When the US imposed tariffs last time it ended bad not only for the US but the whole world. And it even sparked the worst war in human history.
 

 

After Trump’s announcement, China announced retaliating and imposing the same tariffs of 25% and 15% on the US goods imported to China. Goods from pork to aluminum products. Those who Trump is allegedly helping will get slammed the most. And the whole nation with it. And they will also take legal actions against the US at WTO.

Of course, less intelligent Trump supporters do not understand any of it.

 

 · Trading activity today

 

A summary of opening and closing trades.
(premiums received / paid: +$301.00)

Note: This is a cash flow of credits, not profits!

Today, amid another brutal selloff on Wall Street we closed an existing higher call spread and re-opened at a bit lower strikes to collect more premium. If this market stay down in the next 7 days I will have to roll the existing put spread which is now at the money. Any collected credit would help offsetting the loss of the roll.

Honestly, this is something which makes me quite nervous. I am aware of vertical spreads to be difficult to roll or manage when in the money. And I have almost all of them now in the money!

 

 

 

 · Dividend stocks to buy

 

Out of our watch list of 37 dividend stocks the following ones are a good buy at today’s prices (03/22/2018):
 

ABBV
AGNC
AWK
BA
CVX
HD
KMB
MCD
OXY
PG
PPL
XOM
 

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Disclaimer: The list above is based on calculated fair value and 52wk high offset valuation. The values are subjective to our calculations and opinion and may differ from your own. If you decide to trade or buy these stocks, do so on your own risk and do your own homework. The list is not our recommendation to you.

 

 · Market outlook

 

Despite all the tariffs frenzy the market is actually doing what was expected. Originally, we had a short term support at 2700 level but we just broke it and I see the next stop at February lows. We are heading to 2580 – 2600 level to retest the the previous lows.

That will be 200 DMA. Will that hold? I hope so because if not, the next stop is way way below. I actually do not see the next level on any chart so the next stop can be wherever…
 

I still expect this market to improve with the US economy and this selloff will be forgotten. Unless Trump destroys it as he destroyed pretty much all of his businesses such as Trump University, Airlines, and many others. The chance of him ruining this economy is high.