A Bluff Was Called But the Major Risk Still Lurks: Taking Stock

It’s obviously dangerous to call someone’s bluff, especially if that person tends to be a bit on the unpredictable side.

And in this case, Wall Street definitely deduced that an escalation of trade tensions with a target for tariffs Friday was a negotiating tactic and that alone. The S&P 500 almost immediately began to recover their losses on Monday’s open. Small cap names did even better, ending the session with gains on the day, with the Russell 2000 ETF (IWM) closing above 160 for the second consecutive a day -- a level that Baird analysts have targeted, writing last week that until it moves through 159.50, “we churn.”