Index futures are getting pummeled for the second straight night, supposedly because of heightened tariff fears. How is it that these fears lay dormant throughout Monday’s boring session, only to resurface like a torrent of Kilauea lava during off-hours trading? As a former floor trader myself, I’d attribute this dynamic to the ease with which stocks can be manipulated when there’s no one around. In this case, the goal of the sleazeballs who dominate thin markets is to exhaust sellers, the better to run stocks up bears’ old wazoo when they come to their trading screens in the morning. This is what happened Sunday night: a volume-less selloff equivalent to nearly 200 Dow points was reversed at the opening bell by an almost-as-gratuitous rally.

Distribution Masked

There was a net loss on the day, however, which suggests that stocks are under distribution and that the true reasons for the weakness are being masked by headlines attributing the selling mainly to tariff fears.  In actuality, Trump’s latest art-of-the-deal salvo against China took the form of higher levies on things we no longer buy much of from them — stuff like cathode ray tubes. Not that the supposed trade war couldn’t lurch out of control with just a small miscalculation by Trump. But don’t believe that that’s the only thing weighing on the markets right now. A strong dollar, higher oil prices, a downturn in housing, rising interest rates, and corporate earnings that have  probably peaked are all factors. Meanwhile, night owls take heed: From a Hidden Pivot perspective, the E-Mini S&P chart (click on inset) tells me that the next, half-baked rally will come off a low at exactly 2759.00; or if not there, from 2754.75. _______ UPDATE (June 19, 8:31 a.m.): No bounce whatsoever from either pivot. This is warning us that there is urgency and power behind the selling for the first time since mid-March.