Update: Best Case for Bears Today

The best case scenario for bears today is a big miss on jobs. That should trigger a melt-up in stocks because the main pillar of the "it's not a recession" crowd has been employment. The Federal Reserve also cited employment as a reason not to slow rate hikes. Those arguments come crashing down if employment misses big. My only concern in that scenario is the market tends to process this information slowly. Stocks probably rip into the open because rate hike odds would tumble. This should spark the final move higher in the bear market rally. Commodities might rally too based on fewer rate hikes and bonds should rally. The yield curve might have another surge into deeper inversion. Even if it went on for a few days, bears who bought puts for September and October today would probably have decent profits by mid-to-late August. Best case though is a final run here because the market is primed to be stupidly bullish.

Another way that scenario plays out is one more vicious squeeze of the bears with a dip and then rip. NQ would test its support around 12900 and ES would test the low of the prior week range, before going back up.

A very strong jobs report would probably weaken bonds and strengthen the dollar. Eventually, trades related from that would play out. I'm not sure how stocks would react in the short-term. Probably up because that's been the general direction.

Finally, the jobs report is ulimately meaningless. It's one data point. Most likely the report will be within the range of estimates making it also somewhat meaningless for traders. All it will do is remove uncertainty. Instead of ultra-low volume as we saw yesterday, volume will surge as the market zooms towards its intended target. Only in rare situations such as we are in now can a jobs report act like a 2x4 across the face of investors, traders and policymakers.

BTC and ETH are hinting that markets want to run.

Jobs were almost double expectations. This is a macro disaster for stocks with yields surging and the yield curve inverting even more, should it hold. I never trust the first move though. Buckle up! Should be a wild day.