Here’s an excerpt from last night’s log entry. And, per paragraph two, stocks are set to open lower (although could be, or get, worse) this morning:

This evening China is surprisingly (although the Fed announcement was extremely bullish for EM [bearish the dollar]) trading higher, as are SPX futures, although the latter are losing steam at the moment.

This is a precarious spot: Trump is emboldened by this year’s rally; he even swiped at Europe today on trade. Clearly, at the moment, traders are in denial. If they believed that there’d be a deal that didn’t cancel Trump’s tariffs (one he promised yesterday), they’d be selling right now. Could very well be by morning…

In fact, for the sake of reigning the trade talks back in, and toward a workable deal, we could use some hard selling right about now. If we get it, the U.S. is bound to concede (or at least offer some concessions) on the Trump tariffs, with the promise to add them right back if China doesn’t hold up its end of the bargain. That’s an agreement that would work for the markets, until, that is, the U.S. goes after Europe. Then the cycle repeats: market sells off, and, thus, ultimately inspires a friendly trade deal.

For now, my macro assessment allows for the above to take place without precipitating the next recession/bear market. Although the attendant/necessary equity market volatility could have us wondering at times along the way…