The world pretends nothing is happening, but this is clearly a news-driven short squeeze. Monday won’t be calm—set your stop-losses these two days, don’t hold positions against the trend!! Last night saw a stream of negative news, yet the market didn’t drop. Obviously, there are too many shorts, unable to lock in profits. These two days.

Friday’s closing exudes a “deadly calm before the storm”: - U.S. stocks experienced sharp volatility during the session, ending slightly lower—Dow Jones -0.09%, S&P 500 -0.05%, Nasdaq -0.24%; - The U.S. Dollar Index fell slightly but recovered most of its intraday losses; - Gold and U.S. Treasuries both rose, with gold regaining the $4,000 level and the 10-year yield falling to 4.37%. Behind the market moves, there is no deep reflection of the impact from “three bad news”: First, the modest decline in U.S. stocks—it’s not that the problem disappeared, but that it was buried. Almost all news this week was positive, yet the market fell. Oil dropped 10%, Core PCE met expectations, Micron’s earnings were nearly perfect, and the 10-year yield fell over ten basis points—but stocks still fell. All reasons that had been fueling AI’s rise suddenly started to fail; this is more worth pondering than the decline itself. Second, the U.S. launched airstrikes against Iran in response to an attack on a vessel in the Strait of Hormuz. The news was deliberately released at 04:30 Beijing time, half an hour after U.S. stock market close, showing Trump’s protective stance toward the stock market. After the news broke, oil jumped 1.4% and U.S. stock futures quickly plunged, but none of this is visible in the overall closing data. Trump can protect Friday’s close but not Monday’s open, unless another event shifts focus over the weekend. Third, a Federal Reserve official publicly stated for the first time that there will be one rate hike this year. Previously, Fed officials’ remarks on rate hikes were always “hints”—expressing concerns about high inflation. But on Friday (around 00:00 Beijing time on Saturday), Minneapolis Fed President Kashkari “explicitly stated” that a rate hike might be needed. This sentence can be considered the biggest “thunderclap” of the week—a declaration of war from the Fed to the market. The intraday oversold rebound in the U.S. Dollar Index began right at that moment, and the S&P 500 turned lower, but other markets did not take it seriously. At Monday’s open, the market will absolutely not be as calm as Friday’s close.