Bulls on Their Heels, Unlikely Enough Strength to Muster a Stand
The bulls mustered enough strength on Monday to avoid closing anywhere near last week’s lows. That was mildly impressive. However, the Trump Tariff Tantrum is front and center today as it was on Monday as overnight action looks like a nasty 300+ point decline to begin Tuesday. Unlike yesterday, I will be surprised if the bulls have enough power and ammunition left to thwart the bears.
Taking somewhat of a stab in the dark, I would imagine a day where stocks open sharply lower, bounce for an hour or so, establish a range and then sell off again after lunch. If the morning lows are broken, there is potential to see a large down day, somewhere between 500 and 800 points. Obviously, there’s a lot of hyper short-term speculation in there. Again, the bulls would really surprise me if they had enough power to hold the decline to under 150 points on the Dow.
I mentioned bonds on Monday and it will be interesting to see if they have enough strength to trade above last week’s high. Yesterday’s action was not that great. IF they can get moving, it’s not out of the question to see the 10 year note yield below 2.80%.