Good morning,
That was strange… Yesterday’s gap-opening rally—sparked, at least in theory, by another NVDA earnings beat Wednesday night—initially pushed the S&P 500 up as much as +1.9%. Then, almost inexplicably, the market went into a free fall, sliding roughly 3.5% from its intra-day peak to finish the day down -1.55%.
I’m not entirely sure what it means, frankly. But experience has taught me to distrust markets that fall seemingly of their own accord, without an obvious catalyst. Financial media will, of course, rush to assign reasons—news must fill airtime—but take it with a grain of salt.
Gap-up openings followed by sharp reversals are rare. Historical data show only 14 such occurrences, eight of which clustered between October 2008 and March 2009. The most recent was earlier this year during the so-called “Tariff Tantrum” (Bloomberg). History, at least for now, isn’t siding with the bulls.
I’ll dig deeper into what’s behind the move and share more next week – for now, I am instinctively defensive.
Have a great weekend.
Be well,
Mike
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