As I write Wednesday mid-afternoon, all three major stocks indexes are up nicely after a flurry of good news this morning.
Let’s begin with Trump:
- The President said that he has “no intention” of firing Federal Reserve Chairman Jerome Powell
- He appears willing to take a less aggressive approach toward trade with China, saying that his administration’s tariff rate on China is “very high, and it won’t be that high. … No, it won’t be anywhere near that high. It’ll come down substantially. But it won’t be zero.”
Diving into this second point, this morning, The Wall Street Journal ran an exclusive story reporting that Trump is considering cutting tariffs by more than half.
From the WSJ:
President Trump hasn’t made a final determination, the people said, adding that the discussions remain fluid and several options are on the table.
One senior White House official said the China tariffs were likely to come down to between roughly 50% and 65%.
Adding to the good news, the plan could include a tiered tariff system along with a gradual phase-in of tariffs rather than an overnight “on” switch.
Back to the WSJ:
The administration is also considering a tiered approach similar to the one proposed by the House committee on China late last year: 35% levies for items the U.S. deems not a threat to national security, and at least 100% for items deemed as strategic to America’s interest, some of the people said.
The bill proposed phasing in those levies over five years.
Finally, in a keynote address to the Institute of International Finance, Treasury Secretary Scott Bessent outlined a plan to restore “equilibrium” to the global financial system.
He also said that “there is an opportunity for a big deal here” between the U.S. and China.
This comes after his conciliatory remarks yesterday, including, “No one thinks the current status quo [of current tariff rates] is sustainable.”
Bottom line: Outside of signed trade deals, this is what Wall Street and corporate America wanted – normalcy. Something steady that it can plug into its pro formas and use as the basis for capital allocation decisions.
Though stocks are off their highs from earlier in the session, it’s still a strong day in the market as I write. And even if the gains pull back further, we’re encouraged by today’s trade talk.
A key setup for another asset
Here in 2025, the U.S. dollar has been sliding fast.
Even though it’s rallying today on positive trade news, as you can see below, since mid-January, the dollar has lost 9%.
Meanwhile, economic uncertainty has been spiking.
Below, we look at the “Economic Policy Uncertainty Index for United States” from the Federal Reserve.
Starting in 1985, today’s level clocks in at the highest reading outside of the Global Financial Crisis in 2008 and the Covid meltdown in 2020.
Finally, governments around the world are awash in debt.
According to the Institute of Internation Finance, the global debt-to-GDP ratio notched a record high of 328% in 2024. Behind it was a surge in global debt to $318 trillion.
So, combine a crumbling dollar, soaring economic uncertainty, and surging global debt, and what do you get?
(Besides gold setting a string of new all-time highs recently…)
Bitcoin, finally showing signs of acting like an independent hedge!
As I write, Bitcoin has reclaimed $93,000
Although it’s tempting to attribute the gain to the “risk on” market sentiment that’s fueling stocks today, there’s more going on.
But first, let’s be clear – it’s too early to conclude that bitcoin has bottomed. It’s also too early to say that investor sentiment has suddenly shifted, and bitcoin is now considered a rock-solid safeguard of economic value…
But we’re inching in that direction.
First, showing that this is more than a “risk on” rally, below we look at bitcoin and the S&P 500 since April 9. Even with today’s market surge, the S&P is flat while bitcoin is up 12%.
First, a weakening U.S. dollar erodes confidence in fiat currencies, especially for people looking to store long-term value. Bitcoin – volatile as it is – is a hard asset thanks to its capped supply (21 million coins), no central authority, and resistance to debasement.
Second, tied to the first point, bitcoin is a sort of “exit ramp” from a global system addicted to debt. The U.S. is hardly the only nation with soaring debt spending. Too much borrowing/spending weakens fiat currencies (not just the dollar) over time.
Third, during past periods of trade tensions (like the US/China spat in 2019), bitcoin spiked due to cross-border capital flight. Chinese and other emerging market investors were looking for non-sovereign stores of value. Crypto is borderless and doesn’t rely on the U.S. dollar or global trade frameworks.
Put it all together and it’s easy to see why investors are moving back into bitcoin…
The gains aren’t “in spite of global uncertainty,” they’re “because of global uncertainty.”
From a trading perspective, the granddaddy crypto appears ready to build on its recent gains
So says master trader Jeff Clark.
For newer Digest readers, Jeff is a legendary trader with more than four decades of experience. In his service, Jeff Clark Trader, he uses a suite of indicators and charting techniques to profitably trade the markets regardless of direction – up, down, or sideways.
From Jeff’s update yesterday:
The setup in bitcoin looks bullish.
After peaking above $105,000 in early February, bitcoin has been in a consistent downtrend – making a series of lower highs and lower lows.
But, as bitcoin approached $75,000 earlier this month, the momentum indicators at the bottom of the chart were making higher lows.
This sort of “positive divergence” is often an early warning sign of an impending rally.
For the past three weeks, bitcoin has been stuck in a tight trading range near the $85,000 level. This consolidating action has allowed all of the various moving averages to coil together and build up energy to fuel the next big move.
And, after [Monday’s] rally, it appears “the next big move” will be to the upside.
Jeff’s prediction is certainly playing out as I write Wednesday.
But if you want the biggest gains, Jeff recommends you look at bitcoin miners
As you’d expect, when bitcoin is doing well, bitcoin miners tend to follow. But Jeff notes that something unusual has been happening for the past few weeks:
While bitcoin has been chopping back and forth in a trading range between $76,000 and $86,000, the bitcoin miners have been declining to new lows.
The stock declines have been so severe the miners now trade at the lowest value ever relative to bitcoin…
That means one of two things must happen to bring it back into its historic range. Either bitcoin needs to fall, or the bitcoin miners have to rally – or some combination of the two.
While Jeff anticipates more gains from bitcoin climbing, he writes that miners will climb farther/faster:
Traders who are bullish on bitcoin can buy the cryptocurrency right here.
But the bigger gains will likely come from the bitcoin miners.
To his point, between yesterday and Wednesday as I write, bitcoin miners Marathon Digital Holdings (MARA), CleanSpark (CLSK), and Riot Platforms (RIOT) have surged, respectively, 18.5%, 21.4%, and 22.6%.
Trade accordingly.
We can’t mention “short-term trading gains” without a nod to our corporate partner TradeSmith and their cutting-edge An-E trading tool
Today is the final day to watch the free replay of last week’s trading breakthrough from Keith Kaplan, TradeSmith’s CEO, where he detailed TradeSmith’s AI algorithm – “An-E” (short for Analytical Engine).
This cutting-edge trading tool forecasts the share price of thousands of stocks, funds, and ETFs one month into the future along with the conviction level of that prediction.
Because the platform is rooted in quantitative analysis, its advanced predictive modeling isn’t guesswork. An-E analyzes millions of data points, learning patterns, pricing behavior, and momentum signals that most investors would never catch.
Here’s Keith:
While human investors react with fear, delay, or overconfidence, a new breed of trading algorithm – like our cutting-edge system, An-E – is making precise, unemotional forecasts about where the market is heading next…
Unlike humans, AI doesn’t get emotional. It doesn’t chase headlines. It doesn’t second-guess every move. Instead, it digests mountains of data and makes calculated projections – especially when things get messy.
And in this turbulent market, messy is the new normal…
Again, this is the last day to check out Keith’s free replay. Here’s that link.
Finally, huge “congratulations” are due to subscribers of trading veteran Jonathan Rose, who just locked in a 100% trade war winner
For newer Digest readers, Jonathan is the analyst behind Masters in Trading Live.
He earned his stripes at the Chicago Board Options Exchange, going toe-to-toe with some of the world’s most aggressive and successful moneymakers in the business. He’s made more than $10 million over the course of his career, profiting from bull markets, bear markets, and everything in between.
During this market volatility, Jonathan and his subscribers have been winning again.
From his recent Masters in Trading Live update:
The markets can’t seem to find their footing after Liberation Day.
But for nimble traders, all this volatility is creating perfect trading opportunities – as long as we know where to find them.
This week, we scored one of our biggest wins yet after spotting a widening gap between Mexican and Brazilian stocks.
That triple-digit gain wasn’t mere luck… It came from spotting an opportunity to benefit from a key divergence forming between two major markets.
If you missed it, don’t worry – Jonathan writes that market divergences are happening everywhere right now.
He points toward the gold-to-oil ratio, sitting at an extreme 274.74 as an example. He’s also seeing significant gaps between crude oil and refined products.
If you want Jonathan to tip you off about these opportunities – for free – join him for his Masters in Trading Live broadcasts, every day the market is open at 11:00 am
It’s a fantastic way to learn more about trading volatile markets, while also giving you the tools to put a wad of cash in your pocket.
But there’s no pressure to trade either. You can simply tune in to watch, listen, and learn.
Here’s feedback from two of Jonathan’s followers:
Here’s Jonathan, speaking to his subscribers wins, but also inviting new traders to join. I’ll let him take us out today:
Seeing you lock in profits on both sides of this trade is exactly why we focus on these market divergences in the first place.
With so many huge price dislocations and widening spreads in the stock market, our strategy is well-positioned to find even bigger opportunities for profit from here.
Join me for Masters in Trading LIVE, where I’ll show you the specific crack spread setups offering the best risk/reward in this volatile market environment.
Have a good evening,
Jeff Remsburg
