Trump's Threatening a Barrage. Traders Are Squaring Books. Here's What That Means for Monday's Open.

KR Opinion

With the widespread liquidation we’ve observed across the short-term database over the past few days, the most critical number to watch right now is 61% on the intermediate database. That level is the defining line. If we drop below it, it signals that further liquidation is likely and puts real pressure on the intermediate trend, opening the possibility of a sideways drift over the next few months. We saw this exact pattern in 2024, where the market stayed above 61%, moved sideways for a while, and then eventually resumed its upward trend. How we behave around that threshold this time will reveal a lot about how the market will handle the ongoing conflict with Iran and whether the pressure we’re experiencing now has more room to grow.

I went through several of these scenarios in detail in last night’s YouTube video, and I highly recommend watching it if you haven’t already, because I explained what I believe are the most likely outcomes given the current environment.

Turning to Friday, we’re expecting the unemployment numbers, with the consensus forecast around 130,000 new jobs. The ADP report came in slightly better than expected, which is a modest positive, but what really caught my attention in yesterday’s data was the productivity report. Productivity was expected to be about 4.8%, following a prior month that was actually revised upward to around 5.4%. However, the new reading came in significantly below expectations, nearly halving the anticipated pace. It’s possible this is just a one-time anomaly, and I’m not ready to draw a firm conclusion from a single data point, but it’s worth watching closely given everything else happening in this environment.