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Stock investors, think twice before ignoring Trump’s trade rhetoric — he wants to win

The momo (momentum) crowd followed the stock market higher from support to resistance, ignoring President Trump on the trade war.

Now the momo crowd is finding that Trump is aiming to win the trade war. Following the momentum and ignoring the risks of the trade war is not a prudent strategy.

Think twice before following the momo crowd if you are a prudent investor. The momo crowd often gets whipsawed. Let us examine with a chart.

Read:How to avoid a trade war: Just walk away

Chart

Please click here for an annotated chart of S&P 500 ETF SPY, -0.73% Similar conclusions can be drawn from the charts of Dow Jones Industrial Average DJIA, -0.88% Nasdaq 100 ETF QQQ, -0.51% and small-cap ETF IWM, -0.85% Please observe the following from the chart:

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