Time's not up for the Bears  even as it seems nothing can dislodge the Bulls. The reality is money managers 'freaked' on Thursday as the S&P in fairly dramatic fashion, broke through the 'standard deviation' Mean (or for that matter threatened the 50-Day Moving Average); adding more Friday. 

Their response was, as of course we've seen multiple times in this year's 'Rinse & Repeat' series of 'Hail Mary saves'; yet another scramble to get the upside going again, and keep the primary cyclical trend 'alive'. It was a bit more juicy this time, because had we seen a penetration of the 50-Day, probably in some quarters it would be the 'trigger' to get them short; hence vulnerable to be run-in, which was prevented by the desperate intervention on Thursday. Of course (reported or not); the PBOC intervention saved the market on Friday.  

Our thought was a bit of follow-through upside Friday, before risk returns; but the market got that help most media failed to pick-up-on; including the President's Economic Advisor Larry Kudlow. He was on Bloomberg talking of the Chinese 'weaponizing' currency in a manipulative way; something I have also referred to (and they did) numerous times. Even as late as ABC Friday evening news they focused on that statement; not the 'BLINK' that came early Friday US time from Beijing. Whether that translates into real change in their position isn't know; but at least it's a hint of concern.  

The difference I referred to (earlier Friday) was the PBOC; China's central bank; intervening finally with a 20% increase in Reserve Requirements. As a result (it was late Friday China time; early Friday US time) the Dollar softened; the Yuan stabilized and firmed (at least for now). So I viewed it in a favorable way as 'possibly' a tip-of-the-hat by Beijing to the need to sort all this out in an amicable way before it gets truly carried-away. I hope so. 

To avoid a 'hail of locusts' (they worry about that more in inland China as it has history of pestilence, pollution, and plain-old desert sand) blowing way East and South into the major population areas; the PBOC has moved. It's important because if this is a correct interpretation; it might be a gesture to the United States that they're ready to get serious about trade negotiations even as both sides keep ramping-up the public (or advertised) tariff hikes. Puns aside; all media is reporting only greater tariff threats; not the move by the PBOC. It may mean little; so Kudlow is correct in saying they'd be wise not to doubt the President's resolve. But it shouldn't be overlooked. 

In sum: this PBOC action, in theory, can mean more than all the chatter in dissecting the 'Jobs Number' data Friday morning. I will share charts that I think are useful glances at the economy and jobs. However this Jobs topic isn't going to really help the market one way or another.  

What matters here is Trade and Tariffs; and avoidance of a trade war sort of morphing into a Currency War. We must avoid that; I believe Trump (like him or not is also irrelevant) wants to avoid that; and sort things out before Midterms. I think the Chinese don't care about Midterms; because it costs too much in lost business and lost relationships, to wait that long.  

Historically, you should see odds favor periods of volatility (corrections) as I have indicated from mid-July forward; lasting through August or well into September, depending how everything pans-out. The risk in October might well be ameliorated if we can shake the market sooner and get some sort of trade deals sufficient to modulate concerns in that regard in time so that it is not a factor in the Fall Election.  

Bottom-line: the market's firmer than it might have been absent a PBOC move to tighten policy in China; essentially easing pressure on the Yuan. I can't prove that; but the Friday action sustains that perspective, along with continuity of short-covering and some rotational buying (which is why most FANG stocks were down earlier and then firmed later, to assist rotation as the way they held everything together yet-again).  

Next week (aside over-the-weekend events); should see higher prices and has the potential to be an up-and-then down scenario. It's also the week I fly to Europe (Wednesday overnight into Thursday); hence that's probably about when they'll lean on the market if nothing breaks sooner. Only slight humor in that; as S&P will again be overbought soon at this pace.