Stocks Catch Down To Reality Again - Where Next?

Following last night's explanation that the potential for a short-squeeze is significantly reduced, and given the end of the typical month-end shake-out of excess positioning, this morning has seen stocks pull back modestly intraday and catch down to risk assets' view of the world in the short-term. Volume remains light and the question remains - will the European close bring trend reversal, or will Washington open their mouths and change the game again?


The green line represents CONTEXT - a proxy for broad risk-assets -  (red is the S&P 500 futures). Just as we did yesterday afternoon, stocks surged away from 'risk' only to recouple back down to risk's reality...


Chart: Capital Context