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Technically and fundamentally, my answer is yes.

$SPX chart courtesy of StockCharts.Com, annotations by Mish

What Are Gaps?

• Gaps UP occur when a stock opens above the high of the previous day and stays there for the session.
• Gaps Down occur when a stock opens below the low of the previous day and stays there for the session.

In both instances charts appear as if they have a hole. That’s the gap.

Shorting a stock with stacked down gaps is asking for trouble as is buying a stock with stacked up gaps.

$NDX – Nasdaq 100 Daily Chart

$NDX chart courtesy of StockCharts.Com, annotations by Mish

I expected a rally after the stacked down gaps, but nothing like what happened.

Both the S&P 500 and the Nasdaq nearly retraced the entire move lower.

The context is Trump’s trade war, then 90-day suspensions, and now the trade war is back on big time, with additional threats on Apple and the EU.

Bond Market

On May 21, I discussed The Bond Market Is Fed Up with Fiscal Irresponsibility, Yields Surge

The yield on the long bond and the 10-year Treasury surged today on deficit concerns.

The fundamentals and the technical charts are singing the same tune.

Q: What Tune Is That?
A: Stagflation accompanied by a weakening US dollar

Stagflation is not baked in the cake, but the fundamentals and technicals both point in that direction now.

A return to reciprocal tariffs with increased prices would exacerbate inflation and recession issues.

A return to reciprocal tariffs is now the word of the day.

“Talks Going Nowhere”, Trump Threatens EU with a 50 Percent Tariff in June

Earlier today, I noted “Talks Going Nowhere”, Trump Threatens EU with a 50 Percent Tariff in June

What happened to Trump’s claim “200 deals already”?

Obvious from the Beginning: The EU is never going to give up its VAT so EU talks were always doomed from the start on this reciprocal nonsense.

Progress was always imaginary.

The stock market rallied on the back of imaginary progress and tariff rollbacks. Today, Trump all but admitted that there is no progress.

Looking ahead, the technical patterns on equities scream for those gaps to be filled, and the technicals on bonds scream of stagflation.

The bond market could get a reprieve if stocks collapse fast enough and a recession hits fast enough.

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