Recovered from trap, and now?

💡 DMK Insight

The S&P 500’s bullish reversal following the NFP data is a classic case of market manipulation, and here’s why that matters for traders right now. After the initial spike, many traders likely got trapped in a long position as the market reversed sharply. This kind of price action often indicates a liquidity grab, where institutions push prices to shake out retail traders before moving in the opposite direction. For day traders, this highlights the importance of monitoring volume and price action closely, especially around key economic releases like NFPs. Look for signs of exhaustion in the bullish momentum, as a failure to hold above recent highs could lead to a significant pullback. Keep an eye on key support levels; if the S&P breaks below them, it could trigger further selling pressure. On the flip side, if the index manages to reclaim its bullish stance and holds above the recent highs, it could signal a more sustained rally. Traders should watch for confirmation on the daily chart and be ready to adjust their positions accordingly. The real story here is about understanding market psychology and positioning ahead of these volatile events.