I woke up on Friday morning around 4:00 a.m. my time when my trading platforms open up for business and noticed that the futures were up pretty nicely. Figuring that this was likely due to some sort of news-push I checked the morning headlines and noted that the futures pump was being attributed to a phone call between President Biden and President Xi of China. Apparently, they discussed many wondrous things, at least wondrous enough to trigger an overnight futures rally.
Even a pre-market Producer Price Index report that came in at 0.7% versus expectations of 0.6% couldn’t derail the opening gap-up move. I remained skeptical, however, looking to short into the move. Once the market opened, it took it about five minutes to rethink the whole thing and reverse back to the downside in earnest.