It was the market, again. This time, as the last, Trump made a seemingly offhand comment which was designed to put out the fire that he started. It was done in the low volume after-hours, when the impact would be greatest. And, it forced a great many offside traders to cover their shorts.

Like last time, it leaves markets teetering between a recovery on the one hand and a bear market bounce on the other. The deciding factor is likely to be whether Trump can ignore his nature and stick to the script.

continued for members…

Pay attention to the solid white TL connecting the tops since Apr 9. The key for bulls will be SPX’s SMA20 currently at 5404.

The red TL is obviously violated. Though it’s still in place for COMP.Note also that VX and VIX are again testing their Mar 11 and Dec 18 highs. They’ve done this before, only to bounce and produce lower lows in stocks.

Currencies are accommodating the bounce, though there’s room for additional dollar weakness. This raises the question as to whether the US’ trading partners are ready to cave to Trump’s agenda.

The DXY is up around 1% from its recent lows, but it never tagged its .618 at 97.719. There’s a great argument for EURUSD to reach 1.175. And, how the largest holder of US treasuries – Japan – feel about Trump’s tariffs?

CL and RB are both slightly higher. But, TNX is backtesting its SMA20 again.This dramatic drop in the 10Y has flattened the 2s10s – leaving it to backtest the broken red TL.