A New Cold War is Being Fought with Economics

Last Friday, a “flash crash” hit Chinese stocks trading on U.S. exchanges. China’s $440 billion equivalent to Amazon.com Inc. (AMZN), Alibaba Group Holding Ltd. (BABA), dropped 7% in just four minutes.

Those stocks tried to recover early in the week, but are now back at the levels hit last Friday.

This quick drop into despair and then modest recovery were caused by the same thing that has led to most of the quick market drops we’ve seen since early 2018: the trade dispute with China.

This time, a leak from the White House had traders running for the hills.

Except the leak, no doubt intentional, wasn’t meant for the markets. As a trader, it’s easy to get so focused on the short- term action of candlestick charts or news headlines that you forget the bigger picture.

So, let’s take a step back. This leak, that was picked up by Bloomberg News last week, has already been walked back by the White House.

It’s just another of the many give-and-take negotiating ploys that we’ll see in the coming months. And we’ll be able to use these market moves to make money.

Here’s how

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