On 2/9 friday, SP500 was down 1.05% for the day, marking the 6th day of red.
On thursday, the market fell then rallied in the later end of the day despite not having any good news that will ease the inflation and the FED, the narrative by mainstream media for the rally was 'hoping for good data on friday,' which was pretty much impossible because the past week of job data came in either as expected or better than expected which is bad for inflation which leads to rate hike.
Then on friday, 2/9, the market rallied during pre-market due to the anticipation of unemployment data, non farm employment data & average hourly pay data at 8:30am. Non farm employment was a beat, while unemployment was 3.7%, 0.2% higher than expected and average hourly pay was up 0.3%, 0.1% less than expected but still up m/m and all of these data are too small of a change to pivot FED's decision. The market soften immeidatly after that but did not crash too much and sustained until 10:00am when factory orders data came out. The data came out at -1% which is considered as 'good' so the market's rally sustained for a whole 90minutes before eventually crashing.
Analysis
The above was the story, now I will explain abit of my thoughts and analysis.
At after market on thursday and pre-market on friday, 'smart money' bought in because there is expected movements as it is the last job data and all eyes are on it, which caused the market to rally. Main stream media narrates the rally as 'hoping for good data on friday' which makes retail & everyone else buy in as they thought 'smart money' thinks data are going to come in good.
At 8:30, the 3 job data came out and it is 'meh' so the market dropped abit, but immediatly, media starts pumping out news of factory order data which is due at 10:00 so most waited and not sell which is why themarket did not tank.
At 10:00, factory order came out and its narated as 'good', this made everyone think that 'smart money' got it right this time, but truth be told, 1 good data doens'nt make up for a week's worth of bearish data which is why the market crashed in the end. But at 10:00, people did not know that and they were probably in a FOMO state because the market continued to rally slowly for a whole 90minutes. During that 90minutes, i think 'smart money' were taking advantage of buying pressure to the upside to accumulate short positions while big banks and funds are selling without causing markets to fall so thier shorts and sell can be done at a higher price (according to bloomberg, >$15B selling coming).
Sentiment
The market is still overall hopeful and bullish (VIX) because the market rallied so easily upon a small good news. People are still in the idea of the FED pivoting soon as they won't risk crashing the economy hence is still invested and not selling. But this also creates the perfect opportunity for people who have cash to short in bulk and play the market.
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