Retail bull trap

S&P 500 provided clients with long gains of +43 ES pts before flushing after the opening bell – exactly the dynamic predicted in extensive weekend article. More downside before the closing bell called, and materialized in the Asian session – attention is now turning to (government shutdown deferred) NFPs and unemployment rate data.

Questions on everyone‘s mind – will the flush continue, or a buying reversal (Turnaround Tuesday) is ahead? Look to the projections of the job creation data to come, which are in my view going to be skewed to the downside, as in coming in weak. Would that be a reason to celebrate rate cutting amid all the claims of winning over inflation (you know my opinion, check out e.g. latest PCE), or time for worry over real economy status, whether rates haven‘t been kept too high for too long?

I would look to various Treasuries maturities for guidance just as much as the dollar reaction. Full thoughts follow for clients, they have the game plan already… and after the fact, I‘ll publish it in briefest form on X.