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$Invesco QQQ(QQQ)$ $SPDR S&P 500 ETF Trust(SPY)$ $BERTO ACQUISITION CORP(TACO)$ 🌮🚨📉 TARIFF TUESDAY: THE TACO TRADE THAT’S STUFFED WITH VOLATILITY 📉🚨🌮

The tariff clock is ticking, but the market’s not choking on its TACO. Traders are watching closely as the heat turns up on trade tensions, yet Wall Street’s appetite for risk remains oddly intact.

Trump just slammed the grill lid shut on Japan and South Korea with a 25% tariff kicking off 01Aug25. He also sent “Tariff Notice Letters” to 14 countries. Copper spiked 10% on the news, and the VIX popped 8%, but if this is a real panic, the options market sure didn’t get the memo.

Options pricing for July 9, the supposed “TACO Deadline Day,” is only forecasting a 0.6% move. That’s actually lower than the average daily move in July, according to BNP Paribas and Bloomberg. Translation: traders are hedging more for CPI on 15Jul and the FOMC on 30Jul than for the tariffs themselves. It’s almost as if tariffs are just another topping on the macro burrito, spicy but manageable.

🌮 Why It’s a TACO Trade, Not a Ticking Timebomb

• Citi’s Stuart Kaiser says investors are pricing more risk that trade wars could reshape the Fed path, not crush stocks outright

• April’s tariff trauma saw Asia-Pacific ETFs sell off hard, but the half-life of those dips has shrunk thanks to relentless dip buying

• The S&P’s consumer discretionary sector, the most tariff-sensitive, did take a hit, but stocks clawed back some ground, highlighting trader resilience

🌮 TACO Trouble Abroad?

Asia took the brunt of the heat again, with Japan and South Korea directly in the firing line. South Korea’s President Lee Jae-myung and Japan’s Shigeru Ishiba were reportedly among the first recipients of Trump’s letters. Cue the BTS breakdowns and yen volatility surges.

Trump’s direct quote: tariffs “may be modified, upward or downward, depending on our relationship.” The new Art of the Deal is apparently just wing it.

🌮 TACO Traders vs Headline Traders

Interactive Brokers’ Steve Sosnick put it best: “As long as the market can plausibly assert that there is room for negotiation or extension, then it won’t freak out. Cue the theme song, ‘Won’t Get Fooled Again.’”

The real twist? The market doesn’t trust the tariffs to stick until they’re on paper and printing inflation. Right now, they’re just smoke from a political kitchen that’s been serving reheated policies since 2018.

🌮 Sector Watch ~ Who’s Getting Cooked?

• Consumer discretionary remains vulnerable, including retail, fast fashion, and even Tesla

• Asia ETFs have shown the fastest response time, but the moves haven’t fed through to tech or energy yet

• Bond yields, copper, and industrial hedges like $XLI and $DIA may offer cleaner reads than $QQQ or $IXIC for this round of tariff tango

🌮 But Wait, Is It Even a Real TACO Without a Tuesday Dip?

The red candle we got yesterday barely made it to the salsa bowl. Bad news? Just another excuse to buy. Traders have seen this menu before, and they’re still ordering tacos.

Sosnick again: “Thanks to the relentless dip buying, the half-life of dips has been drastically shrinking.” In other words, the market doesn’t fear tariffs. It fears missing the next TACO bounce.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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