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The tariff announcement on April 2 carries a high degree of uncertainty, and the sell-off in US stocks to end the week was just one sign of that. Given the oversold stock market, an announcement that is more benign than expected could lead to quite a round of short covering.

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Meanwhile, an announcement that conveys elements of shock and awe could continue to put pressure on U.S. stocks and the U.S. dollar.

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Image Source: Barchart

What is important from a trading psychology perspective is that it's not necessary to predict what will be announced. That is because whatever is announced will impact large market participants and create short-to-medium term trading opportunities.

In other words, successful traders identify what is happening and respond quickly. They don't become caught up in what they think will happen or what should happen. Uncertainty brings opportunity, but only when traders and investors perceive a shift toward greater certainty.  

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