China blacklisted four Japanese defense research institutes and slapped export restrictions on dozens of Japanese firms Monday. Drone makers got hit. Nuclear firms got hit. Defense institutes got hit. Retail traders checked their Toyota positions and wondered if this meant anything.
It doesn't.
The technical indicators remain unchanged. The 50-day moving average has no opinion on geopolitical tensions. The RSI cannot read Mandarin. Your bullish divergence on the Japanese yen doesn't care that China decided drone technology should stay home. You drew a triangle on a chart last week and now you think export curbs matter to your position. They don't. The triangle was always meaningless. This news just gave you a new excuse to explain why you're losing money.
Some guy named Derek absolutely panic-sold his Japan ETF at 9:31 this morning because he saw "China" and "blacklist" in the same headline. He doesn't know what a defense research institute does. He cannot name a single drone manufacturer. He thinks "export curbs" means Japan can no longer ship cars to Beijing. Derek is now cash-gang, which means he'll miss the bounce he's been waiting for since February, and he'll buy back in at the top while telling himself he's "waiting for confirmation."
The funniest part isn't that China targeted nuclear firms and drone makers. The funniest part is watching traders pretend they understand the supply chain implications while they're still trying to figure out why their Robinhood account shows a negative number. You don't know what these Japanese companies manufacture. You cannot name four defense research institutes in your own country. But sure, recalibrate your entire thesis around an export restriction you learned about six minutes ago.
Derek's charts didn't predict this, which means Derek's charts don't f*cking work.
Photo by Takashi Miyazaki on Unsplash
Leave a Comment