With global markets extending on torrid gains for the second day in a row on what has been just one catalyst: Trump's apparent easing in tone over the trade war with China, which started with a Thursday morning tweet (just as the market had turned red after a disappointing mfg ISM report) saying trade discussions with China "are moving along nicely", followed by a Bloomberg News report that Trump has asked key cabinet secretaries to have their staff draw up a draft deal that he hopes will signal an end to the trade conflict, skepticism abounds.

To be sure, the rally in US stocks and the Yuan has helped both Trump and Xi achieve short-term goals: the S&P is surging ahead of the midterms, boosting voter sentiment, while the Yuan is sharply higher and further away from the 7.00 level, giving Xi more space (to resume devaluation when needed).

It is this particular confluence of interests that has prompted many on the sell-side to question the credibility of the alleged "deal".

Commenting on events in the past 24 hours, SocGen's strategist Kit Juckes wrote that "either President Trump is paving the way for a trade deal being agreed at the Buenos Aires G-20 summit later this month, or he’s cynically driving up equity indices ahead of U.S. mid-terms. What’s for sure, is that talk of a trade deal has added further juice to the last few day’s risk appetite."

Sean George, Stockholm-based CIO at Strukturinvest, agreed that the rally sparked by the report would be at best short-term: "For us at Hamiltonian, we view this as a short-term tactical trade. We are cognizant of the elections on Tuesday, and the cynic in me says maybe this is being done for votes", he told Bloomberg.

"When Trump wants to bump the market ahead of the mid-terms the market likes it," Saxo Bank’s head of FX strategy John Hardy said, and noted that while it might just be “political theater” from Trump, for now, the real test would come when he and China’s President Xi Jinping meet at a summit of world leaders later this month in Argentina.

The bottom line, as Bloomberg's Stephen Kirkland writes, is determining whether the comments of the past 2 days are "signal or noise":

With the S&P 500 posting its worst month in seven years just days before midterms, it's no wonder there's skepticism over the timing of Trump-Xi call. The signal in this situation -- which would rekindle the outlook for global trade and reduce risk premiums -- will come from details on negotiated positions, and there's been little released on this front.

To be sure, while Trump's verbal optimism is easily explainable by short-term ulterior motives - a bounce in stocks - rather than nearing any compromise, Trump's economic adviser Larry Kudlow noted the need to still reach agreement on intellectual property rights and cybersecurity. Meanwhile, on Thursday the Justice Department charged a Chinese state-owned company with conspiring to steal trade secrets from Micron Technology.

As Kirkland reminds us, back in May, "the last publicly reported phone call between the two, initial positive headlines deteriorated into a standoff days later."

So can you really blame traders for thinking "Fool me once, shame on you"?

Actually, judging by S&P futures, which are up 165 points from Monday's afternoon sell-off, and up 50 points from Thursday's intraday low...

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... the market has no problem with either being "shamed" or "fooled" again.