The S&P 500 has extended its decline to 1% on the day after earlier rising as much as 0.8%. The turnaround has come on fears of an Iran-Israel war.
SPX 10 mins
I would put the actual odds of a war at ‘remote’ so the trade here is to buy this dip. And I think many traders would like to do just that but it’s a tough trade to make when you could easily be right about it and get blown up by non-farm payrolls.
Moreover, after non-farm payrolls, you have to think about the weekend and there’s the risk of getting caught out by a war/attack over the weekend.
So that’s the problem for the bulls here. So while there’s a good case for buying risk here, it’s tough to argue against waiting until Monday to do it.