It was an interesting day in the market, one that felt oddly reminiscent of the old MTV show Celebrity Deathmatch—except instead of claymation wrestling, we got a social media showdown between two billionaires airing their grievances in true Festivus fashion.
This time, it was Elon Musk and President Trump trading jabs—the ultimate battle of egos: the world’s richest man with no filter versus the world’s most powerful man, also with no filter. One can only imagine the “truths” and X-posts still to come.
Tesla’s stock didn’t find the mudslinging amusing, dropping more than 14%. For much of the day, the S&P 500 moved in step with Tesla (NASDAQ:TSLA), though the broader market didn’t really feel the impact until around noon.
Anyway, with the jobs report coming today, implied volatility was bound to rise—whether or not Trump and Elon decided to feud. By the end of the day, the VIX 1-day closed at 19, which feels more in line with where it should be ahead of an economic report as important as the jobs report.
The S&P 500 fell about 50 basis points on the day, and the reversal formed a bearish engulfing candle on the chart.
Additionally, those reversal patterns we talked about over the weekend—while they seemed all but dead—got a flicker of life from yesterday’s decline. For those patterns to stay in play, the index really needs to drop below 5,910 today, which is only about 50 basis points lower than yesterday’s close, or at least get close to it.
Otherwise, who knows what today will bring?