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While the markets have rallied, I think there are still reasons to be concerned. After a late-day rally and selloff, the ES and NQ started out where they left off—going down. In the past, when there were crashes and bear markets, I felt confident that the worst was over. But that’s not the case today, and I don’t think it will be next month, next quarter, or even next year.

There are several problems the U.S. is facing: an aging population, inflation, national debt, trade deficits, a weak dollar, weak treasury markets, geopolitical strife, and just an overall concern about the future. I’ve been part of every stock market pullback and crash since 1980, and I think there are more risks now than there have ever been.

I asked GROK what the odds were of the S&P making new lows, but the answer was mixed. Paul Jones from Tudor Investments was more pointed.

Jones said:

“For me, it’s pretty clear. You have Trump who’s locked in on tariffs. You have the Fed who’s locked in on not cutting rates, and that’s not good for the stock market. We’ll probably go down to new lows—even when Trump dials back China to 50%, for me, it’s pretty clear.”

“He’ll dial it back to 50% or 40%, whatever. Even when he does that... it’d be the largest tax increases since the ’60s. So you can kind of take 2%, 3% off growth.”

Jones went on to say that “Unless they got really dovish and really, really cut, you’re probably going to go to new lows. And then when we’re at new lows, the hard day will start to follow, and it’ll probably create the Fed to move, create Trump to move. And then we’ll get some kind of reality.”

I took orders from Paul Jones when he made a name for himself during the 1987 crash. He worked with his friend Peter Borish and quite literally sold the shit out of the SPU in the days and weeks leading up to the crash. Back then, he became what I call a trading folk hero. Today, he resides in West Palm Beach where he manages $13bn.

West Palm Beach has become Wall Street South as several notable hedge fund managers and banks have moved there over the last four years. Here’s a story on Tudor making waves in his neighborhood:
Paul Tudor Jones Buying a Public Street in West Palm Beach – Robb Report

Yesterday, the ES did pretty much the same as it did on Monday—rallied after the open, sold off, and then rallied again, with a whole lot of chop in between. During the hour of power (3:00 to 4:00, and sometimes after), the futures sold off down to 5636.50. Total volume on Monday was 965k, and at 3:12 yesterday, it was already 980k, so there was higher volume yesterday.

The MIM was $2 billion to buy, but someone whacked it and the ES sold back off down to the 5623 area on the cash close. Here's what the PitBull had to say about it:

IMPRO : PITBULL : (4:01:12 PM) : this is really stupid in the last 15 minutes.

So the ES has been up 9 of the last 11 sessions, now down 2 in a row. Last week, I started talking about the winning streak and how the ES was getting to a critical juncture after the 8th straight up day. I said I thought we could correct for a few days. So, we got a couple of down days—now the question is: do we get a few more, or do we bounce?

I’m not sure. That was an ugly close yesterday, and in most cases, I’d say you’re supposed to step in and buy it. But I’m not sure there isn’t further downside. It's Fed rate decision day, and the probability of a rate cut ranges from 3.5% to 5.5%. Powell has already indicated rate cuts are possible later in the year, but who knows, maybe after Trump peppered him, he’ll be more dovish.

Like I said above, I don’t think there’s any “one and done” when it comes to the abundance of unsolved economic problems. A lot of people say Trump started this economic letdown, but the real issue lies with the U.S. economy and its high debt.

If every person in the U.S. helped pay off $36.8 trillion, each person would owe $107,593. And guess what? That’s not going to happen.

Globex just opened 40 points higher after this headline hit:
US Treasury Secretary Bessent and Trade Representative Greer to meet with China’s lead representative on economic matters later this week in Switzerland.

The ES rallied all the way up to 5689.75 and then dropped back down to the 5623.00 level. Like the PitBull said above, this is stupid!

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