Navarro Tantrum Flash Crashes S&P Futures Until Stick-Save by President Trump

US Trade Representative Peter Navarro, known as a China hawk, he even wrote a book warning the West about the communists, said in a Fox News interview last evening that the China trade deal is "over." Boom. S&P futures flushed nearly 60 handles as the mess was sorted out. Navarro walks back the comment saying he was referencing the future trade negotiations and not the phase one deal. He says the comments are taken out of context. Navarro says US-China relations are strained because of the coronavirus (COVID-19) that originated in China. The business media and international traders and investors took it to mean the phase one deal has fallen apart creating the mini flash crash.

President Trump had to pull back the satin sheets, place his blindfold on the nightstand and slip his orange feet into his fluffy real-fur slippers to tweet that all is well with the trade deal. Futures recover. As seen on the righthand side of the chart, S&P futures now pop to +15 at 3:30 AM EST. VIX 31.45. The central banks are maintaining their jackboots on the throat of volatility to keep stocks elevated.

So the Navarro Tantrum results in a drop of 60 S&P points, then a recovery of 60 points, a flash crash profile. Dip-buyers are tripping over each other to buy, buy, buy, in this overly complacent and euphorically bullish stock market. Just think, the US stock market may experience another trillion-dollar flash crash event like 5/6/10 but the recovery side of the flash crash profile will not occur. That will be a sight.

The financial markets are a joke nowadays with any little news bite moving stocks, bonds and currencies wildly to and fro. Crony capitalism is breaking down in America and the ongoing social unrest and developing class war (rich versus poor) will continue for many years forward. In a nutshell, the wealthy elite class in America destroyed the middle class over the last five decades so there is no longer any fabric or glue to hold the country together. It is humorous, although tragic, that the privileged class, and its upper middle class sycophants, that control the media and appear on television and radio shows daily, do not understand the problem as yet.

For now, the stock market hangs in there with the Federal Reserve and other global central banks printing money like madmen to maintain a world awash in liquidity. It is fascinating to watch develop in real-time. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note: Chart is provided by CNBC and annotated by Keystone.