UPDATED AT 3:30 PST

For those of you reading this later in the day, this news is significant! Trump exempts phones, computer, chips from tariffs. Expect a gap up in most tech and chip stocks on this news on Monday morning. I don’t know how markets will react to this, but this could be HUUUGE, like never before (like Trump says). 

QQQ Analysis

We’ve been using QQQ as our benchmark to track this massive historical correction, as it has consistently served as the leading indicator. The two signals we’ve been watching closely are:

MACD (5,13,5)

Since the regular MACD is a lagging indicator, I introduced the concept of using a short-term MACD to generate earlier trading signals. This is one of the indicators Maya uses to identify early trade setups as well (What is Maya? [Read here]).
When we see a bullish MACD crossover, it can be used as a signal to begin entering trades. However, because the short-term MACD is more sensitive to market noise and can produce false positives, proper trade management is key. The best practice here is to exit trades if the MACD crosses back down, indicating a possible reversal.

MACD (12,26,9)

This is the traditional MACD used by most market technicians to identify longer-term trends. While it’s slower to react (being a lagging indicator), it’s less prone to noise and produces fewer false signals.
That said, no indicator is perfect—it’s always essential to cross-reference what the indicators are telling you with the broader macroeconomic context, which brings me to the next point…

Tariffs!

Here comes the macroeconomic picture—the one force that can wipe out even the most beautiful technical setup in the blink of an eye.

During the 2018 U.S.–China trade war, tariffs sent shockwaves through equity markets, triggering risk-off sentiment and periodic corrections. Sectors like technology, industrials, and consumer discretionary—all heavily reliant on global supply chains and foreign revenue—were hit the hardest. On top of that, tariffs tend to be inflationary by increasing the cost of imported goods, making the Federal Reserve’s job even harder as it tries to balance inflation and interest rates.

Well, here we are again—the same recipe, just reheated. While some may argue this is a necessary step that will ultimately benefit the U.S., in the short term, it injects a high level of uncertainty, which markets hate.

The biggest wildcard? China. Historically, China has been just as stubborn as Trump, known for slapping retaliatory tariffs right back with equal force. Even a simple phone call from President Xi signaling a willingness to explore an agreement could remove the uncertainty clouding the market—and that alone would be enough to spark a sharp rally.

Until then, we’re not out of the woods yet.