May 31, 2025
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Don't Sell in May — Ride Russell 2000 Best Eight Months + TACO Trade
With stocks popping on AI boom, Iran deal, and oil retreat news today, the Russell 2000 is up 16% since October intraday, leading the major indexes. NASDAQ is up ~8%, S&P ~7%, and DJIA ~5%. This is the heart of NASDAQ's and R2K's Best Eight Months — November through June.
The TACO Trade Trump Presidency Seasonal Cycle chart we've been tracking shows the spring bottom and subsequent rally right on track. We're not selling in May. We're holding NASDAQ and small caps through the Best Eight Months and letting the TACO Trade run.
When and if seasonal and midterm year weakness materializes, our MACD timing indicator will provide the signal to reposition — not Sell in May and go away. For now, technicals, earnings, macro trends, and the news cycle all point the same direction, and you don't fight the tape.
Man, this took me way too long to realize but, guys, Trump is manipulating the stock market.
Think about it, every single day he goes out and says something about how we're really close to an Iran deal, even when that is explicitly contradicted by evidence or all the other statements from his administration. Obviously, there are concerns that he's losing touch with reality for various reasons, but someone who's losing touch would not generally be this consistent.
There's another factor to consider, though, the TACO trade. Over the last year or so, Wall Street has gotten used to the idea that they can influence presidential policy by trading en masse, specifically by selling and dropping the market in response to really stupid moves. And not just the stock market, bonds and commodities as well. Pretty consistently, Trump has chickened out of some of his more extreme moves when this happens.
At this point, the very clear expressed desire of the markets is for the Strait of Hormuz to open again. Given the current military and political realities, that is only going to happen with a negotiated deal. If Trump gives up on making a deal quickly or if he proves incapable, markets will fall and oil prices will rise. On the other hand, pretty much the only political support that Trump has left is from Iran hawks and any deal that is within reach at the moment would be unacceptable to them.
So Trump can't make a deal because it would cost him some of his last political support and he can't admit this because the stock market, probably one of the last remaining bright spots in the economy, would likely crash and oil prices, already painful, would soar.
Daily remarks untethered from reality are the solution because, let's face it, Trump has never been one for long-term planning. We saw that in full force in his covid response; had he done a quick shut down in the spring and gotten things under control in the summer, he could have run his fall campaign on the economic bounce of reopening, but he was only capable of understanding unpopularity in the moment.
Keeping the stock market elevated beyond what economic fundamentals will support only makes the eventual correction more painful but, as long as traders are more focused on rewarding or punishing what Trump says, he can keep the scam going for one more day.
And that's what we're seeing. Trump isn't spouting nonsense about Iran negotiations because he's losing it (at least, not just because he's losing it) but because he's figured out how he can manipulate the market and I'm still working out how terrifying this is that the people who move huge sums of money in our economy have let this happen.
Trump Weird News - Trump TACO Trade
"Trump Always Chickens Out" (TACO)
Mike Luckovich
* * * *
LETTERS FROM AN AMERICAN
May 28, 2025
Heather Cox Richardson
May 29, 2025
Today’s news continues yesterday’s.
Judges continue to decide cases against Trump, with a three-judge panel at the U.S. Court of International Trade ruling today that President Donald J. Trump’s sweeping “Liberation Day” tariffs are illegal.
The judges, one appointed by President Ronald Reagan, one by President Barack Obama, and one by Trump himself, noted that the U.S. Constitution gives exclusively to Congress the power to impose tariffs. In 1977, Congress passed the International Emergency Economic Powers Act, often abbreviated as IEEPA, delegating to the president the power to adjust tariffs in times of national emergency, but Trump has used that power far beyond what the Constitution will permit.
Since he took office on January 20, 2025, the judges noted, Trump “has declared several national emergencies and imposed various tariffs in response.” But the IEEPA has “meaningful limits,” the court writes, and “an unlimited delegation of tariff authority would be unconstitutional.” The court blocked all the tariffs Trump imposed under the IEEPA, thus ending Trump’s tariff spree, although the administration will appeal.
“Congress manifestly is not permitted to abdicate or to transfer to other the essential legislative functions with which it is thus vested,” the court writes.
That principle echoes far beyond tariffs, as the impoundment of funds by the “Department of Government Efficiency” takes from Congress the power to pass laws that the executive branch must faithfully execute.
Tariffs were in the news today in another way, too, as Wall Street analysts have begun to talk of “TACO trade,” short for “Trump always chickens out.” The phrase was coined earlier this month by Robert Armstrong of Financial Times and refers to Trump’s habit of threatening extraordinarily high tariffs and then backing down. Armstrong noted that investors have figured out that they can buy stocks cheaply immediately after Trump’s initial tariff announcement and then sell higher when stocks rebound after he changes his mind.
Trump’s tariff machinations—he has moved them more than 50 times since he took office—are also enriching the Trump family. Last week, Trump’s son Eric Trump joined Vietnam’s prime minister Pham Minh Chinh in a groundbreaking ceremony for a $1.5 billion luxury real estate development with three 18-hole golf courses outside the Vietnamese capital of Hanoi.
Vietnam sends more of its exports to the United States than to any other country, and after Trump hit Vietnam with 46% tariffs, top officials in Vietnam ignored the country’s own laws to ink a hurried deal with the Trumps to head the tariffs off. The Trump Organization is also cutting deals in Serbia, Indonesia, and the Middle East.
Trump’s pardons also continue to be in the news.
Today the president granted clemency to 25 people, including former Representative Michael Grimm (R-NY) and former Connecticut governor John Rowland, both of whom were convicted of tax fraud. Trump also commuted the six federal life sentences of Chicago gang leader Larry Hoover, 74, who was convicted of murder, extortion, money laundering, and drug related offenses, and from prison ran a notorious drug gang that had about 30,000 members across 31 states and brought in an estimated $100 million a year. Hoover still faces what’s left of a 200-year sentence in Illinois for murder.
While Trump’s pardons of Republicans convicted of tax crimes seem in keeping with his favoring of the wealthy, Trump’s commutation of the sentence of a gang kingpin seems an odd counterpoint to his administration’s stance on undocumented immigrants. Administration officials insist they must be able to deport migrants they allege are gang members even if they have no criminal histories. They can ignore due process, they claim, because of the dangers those individuals present to the American people. And yet Trump has now commuted the sentence of a gang leader convicted of the very sorts of crimes the administration insists justify denying to undocumented immigrants the rights guaranteed by the Constitution.
Hoover’s pardon is reminiscent of Trump’s advice to the right-wing Proud Boys in September 2020 to “stand back and stand by,” as he courted the support of vigilante groups to help him steal the 2020 election. It is in keeping with Trump’s statement that he’s “looking at” pardons for the men convicted of conspiring to kidnap Democratic Michigan governor Gretchen Whitmer.
Tonight, after news broke that the judges had ruled his tariffs illegal and after he had reacted angrily to a reporter’s question about the “TACO trade,” a weakened Trump reached out to his alt-right base as he appeared determined to demonstrate dominance. He posted a meme on his social media account showing an image of himself walking toward the viewer on what appears to be a wet, nighttime city street. Pepe the Frog, a symbol of the far right, stands in the background.
Above Trump, in all capital letters, are the words: “He’s on a mission from God.” Below his feet, also in all caps, the message continues: “& nothing can stop what is coming.” This is a phrase from the right-wing QAnon conspiracy community and refers to the idea that members of the “Deep State” and its collaborators will soon be arrested.
LETTERS FROM AN AMERICAN
HEATHER COX RICHARDSON
T.A.C.O.
Trump Weird News - Trump Burger Chickens Out
the clown cabinet :: MIke Luckovich
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Today is Day 129 of the attempted Fascist coup against America. There are 523 days until the midterms. We are winning. (see below)
Last night, after the news broke about the three judges in the Federal Court of Trade having declared all his “Liberation Day” traiffs and all since to be unconstiutional and therefure null and void and after he reacted angrily earlier in the afternoon to a reporter’s question about the “TACO trade,” a weakened Dimbulb reached out to his alt-right base in a desperate attempt to demonstrate dominance. He posted a meme on Lies Anti-Social showing an image of himself walking toward the viewer on what appears to be a wet, nighttime city street. Pepe the Frog, a symbol of the far right, stands in the background. At the top of the screen,in all capital letters, are the words: “HE’S ON A MISSION FROM GOD.” At the bottom of the screen, below his feet, and also in all caps, the message continues: “& NOTHING CAN STOP WHAT IS COMING.” This phrase comes from the right-wing QAnon conspiracy community and refers to the idea that members of the “Deep State” and its collaborators will soon be arrested. The truth is, the legal decision yesterday and the humilation at the press conference are just the two latest demonstrations of how he is losing losing losing. He has lost the vast majority of the legal cases Maladminstration II has been involved with, including legal brakes being put on every illegal assault on the government since Enshittification Day. The only people who would be stupid enough to think he is strong are the lifetime losers of such bullshit cults as QAnon and ignoramus losers from the lumpenproletariat like the Proud Boys and other inbred rednecks among the Militia Morons. The truth is, Donnie is losing at every crime against the country he tries to commit.
This morning, alleged Chairman of the National Economic Council, Adjunct Professor Kevin Hassett - who couldn’t even make it to Associate Professor at the cow college he was teaching at - managed to demonstrate again why he hasn’t got the brains god promised a crowbar when he went after the tariffs decision, vowing that the decision would be overturned when he was on fellow drooling moron Maria Bartiromo’s “Mornings With Maria” on Faux Snooze, saying: “This trade negotiation season has been really, really effective for the American people, and it’s unfortunate that people would attack it, as the journalists did, or the way the judges just did. These activist judges are trying to slow down something right in the middle of really important negotiations.” He went on: “What’s going to happen is, first, we’re going to see what happens on appeal, and we’re very confident in our success there, because, after all, hundreds and hundreds of thousands of Americans have died because of mostly Chinese fentanyl and Chinese fentanyl coming in from Mexico and Canada. FACT CHECK: As the court pointed out, this is not a thing that allows Donnie to fuck with the world) There are different approaches that would take a couple of months to put these in place and using procedures that have been approved in the past or approved in the last administration, but we’re not planning to pursue those right now, because we’re very, very confident that this really is incorrect.” This moron has proven so far that he doesn’t have an IQ above ambient room temperature; I now think it’s not even that high.
[..]
Doctor Mengele, aka The Wrong RFK Got Shot, has announced that federal scientists will no longer submit papers to leading medical journals, saying: “We are probably going to stop publishing in the Lancet, the New England Journal of Medicine, JAMA and those other journals because they are all corrupt.” He went on to say such publications are “vessels” for pharmaceutical companies. In place of that, he proposed creating “in-house” publications by the department that will become “the preeminent journals” in their field. “They are going to become the preeminent journals, because if you get NIH funding it is anointing you as a good, legitimate scientist.” Not any more it isn’t, Brain Worm Boy. A week ago, he released Maladministration II’s “Maka America Healthy Again” report, which said the following: “There is a concerning trend of overprescribing medications to children, often driven by conflicts of interest in medical research, regulation, and practice. This has led to unnecessary treatments and long-term health risks.” This is all another attempt to drive world-class American medicine back to the 19th Century.
But that’s not even the worst of what Secretary Brain Worm has done: RFK Jr’s highly-touted “Make America Healthy Again” report turns out to have misinterpreted some studies and cites others that don’t exist, according to the listed authors. The report was written with AI, further proving my father was right 68 years ago when he said at a scientific conference, “Them that think computers think, don’t.” He claimed the report harnesses “gold-standard” science, citing more than 500 studies and other sources to back up its claims. Those citations, though, are rife with errors, from broken links to misstated conclusions, and seven cited studies don’t actually exist. For instance, epidemiologist Katherine Keyes is listed in the MAHA report as the first author of a study on anxiety in adolescents; when contacted, she said: “The paper cited is not a real paper that I or my colleagues were involved with. We’ve certainly done research on this topic, but did not publish a paper in JAMA Pediatrics on this topic with that co-author group, or with that title.” A section describing the “corporate capture of media” highlights two studies it says are “broadly illustrative” of how a rise in direct-to-consumer drug advertisements has led to more prescriptions being written for ADHD medications and antidepressants for kids - however neither study exists. Kennedy said about the report, “Never in American history has the federal government taken a position on public health like this.” He’s right, but not the way he thinks he is. “Them that think computers think, don’t.”
[TCinLA]