After the announcement of the pause in the trade situation, the markets went all euphoric. The fear/greed index right now is extreme greed. This index is one of my favorites as it guides me when to buy/sell stocks. Even if you're a long-term holder, it might still be useful. The market is also overbought. I'd say this is the time to be cautious. Remember this fact, based on years of historical data: no market goes up forever, especially when it goes up so high so quickly. You can look at every chart you can think of, when a stock/index goes up so much so fast, eventually it will come down. The converse also happens, the bigger the crash, the higher the eventual rebound, which is what we're witnessing right now. I'm not saying this is the time to sell everything, but personally I'd take some profits and start to do some hedging. Any bad news can cause the rally to stop or even drop. My belief is that even though the liberation day losses are erased, it may not go back to all-time high. There is still some risk of stagflation/stagnancy even though there might not be an outright recession.
Difference from 2018-2020 Trade Situation
It is likely the 30% on China and 10% universal on major trading partners will be the 'best-case' baseline going forward. Not to mention there are also 25% on auto, steel, etc. Possibly more incoming. Also we have high interest rate, and a record high of consumer credit card debt. Note that 70% of U.S. economy is based on consumption. A weakness in consumer spending spells trouble, and at the beginning there is already some warnings from consumer staple companies/retailers regarding this. No doubt some of these may be cushioned by other areas such as tax cuts, investment growth, AI capex, etc. But it remains to be seen how it will play out over the next 3-6 months.
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