That was quite the short squeeze yesterday and in premarket. With traders feeling invincible in the face of any kind of nonfarm payrolls number, we got another drift higher ahead of the jobs number in the premarket. This is something that has repeated many times, and is something worth betting on in the future.
Although I started a short equity futures position yesterday, and underwater, the long bond position has offset most of the losses. I have lightened both positions after the jobs number. But with traders conditioned to believe all dips are buying opportunities, this market will not go down easily.
It may sound ridiculous in the face of a big gap up on a bad jobs number, but I think we will still break SPX 1740 with authority next week. I will look to add to shorts around ES 1785, which is an area of heavy resistance from last week.
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