Good morning, traders…

You’ve probably noticed that the stock market has an uncanny ability to do exactly what traders least expect. 

This week has been a perfect example.

On Monday, we got what looked like a textbook “gap and go lower” setup: the Nasdaq opened with a nasty leg down after a massive red day last Friday. 

Meanwhile, negative headlines were flying about “Liberation Day.” Sentiment was at rock bottom, fear was palpable, and the charts were breaking down. 

But by mid-morning on Monday, the selling had fizzled out. The tape firmed up. Buyers started stepping back in. 

Before long, stocks were positively ripping. The indexes closed green. 

Two days later (at the peak of this rally), the Nasdaq was up more than 3.4% from its lows:

If you bought SPY or QQQ put options on Monday, your contracts have been obliterated. 

But a contrarian, short-dated call option play on either could’ve netted you hundreds (or even thousands) of % in less than 48 hours. 

The market loves to do this. It sets bull traps and bear traps to extract money from chasing moves too high (or, in this case, too low). 

It’s like trying to play basketball against someone who only shoots with their left hand — until they cross you up with the right and leave you sliding across the court as they convert the easy layup. 

Today, I’m gonna show you why the market always does what everyone least expects — and how to avoid getting caught in these traps.

What Are Bear Traps and Bull Traps?

A bear trap happens when it looks like a stock (or index) is breaking down — usually through a key support level — and traders pile in short, expecting more downside. But instead of following through lower, the move stalls out, reverses, and rips higher, trapping those short-sellers and forcing them to cover into strength.

A bull trap is the opposite. Price breaks out above a key resistance level, volume might spike, and traders rush in long thinking a big move is starting—only for the breakout to fail, reverse, and head lower, catching those buyers on the wrong side.

Both traps work the same way: they lure traders in with a strong move that looks real — but doesn’t stick. The result is usually fast, sharp price action in the opposite direction, fueled by trapped traders getting squeezed out.

Monday morning was a textbook bear trap, tantalizing traders into shorts or puts before a parabolic reversal to the upside. 

What Monday’s Bear Trap Showed Us

Monday’s reversal wasn’t a random bounce — it was a signal. 

It showed that the selling pressure had gotten overextended. That sentiment was too negative. That traders were positioned for more downside, and the market had other plans.

These are the moments where directional traders need to pay close attention. Not to predict — but to observe and respond.

When headlines line up with emotion, but price does not confirm the move, that’s your tell. That’s when the best setups often form — not when everything feels clean and obvious, but when the crowd gets caught leaning.

Today’s tariff news might be another chance to see that play out. Or it might be a reset that stalls this bounce. 

The key is the reaction — not the announcement.

Avoid the crowded, mainstream, “obvious” trades. If it seems too easy, it probably is. 

Watch how key names behave. Watch how volume shifts. Watch if buyers defend support, or start giving up. 

Price action will tell you more about what’s coming next than any headline…

What to Know About “Liberation Day”

Speaking of headlines…

Today, Trump is set to announce a broad set of new tariffs aimed at multiple countries. From raw materials to cars to manufactured goods, this rollout hits a wide chunk of global trade. 

The political messaging is aggressive — and the economic impact is still unclear.

But what’s been made clear over the past week is that this kind of policy move has the potential to jolt the market in either direction. 

Tariffs mean uncertainty. They raise questions about retaliation, earnings pressure, and sector fallout. Industrials, semis, autos, multinationals — all could feel it. 

And that’s exactly why traders need to be extra focused today.

Because after two days of strength, we’re heading into this with momentum and a fresh macro headline that could throw things off course — or, just like Monday, get faded and flipped…

How to Trade “Liberation Day”

Keep it simple. Don’t chase narratives. 

Watch what the Smart Money is doing. Focus on setups from the OMEN Scanner.

If this rally is for real, we’ll see healthy consolidation — low volume pullbacks, strong bases, breakouts that hold. That’s when pullback entries and breakout trades offer solid directional potential.

But if “Liberation Day” gets really bearish — if we see volume spike on red candles, key levels snap, and leadership names stall — then we adjust. We wait. We let price prove itself again.

Either way, don’t guess. Respond.

I have no idea what’s gonna happen today. But I’ll come prepared with my levels, my process, and my experience — ready for anything the market throws at me. 

I want you to do the same. 

Monday’s bear trap punished the obvious trade. It does that a lot. And now, with a new narrative in play, we get another test of that same dynamic.

Price action tells the most important story. 

Trade what’s in front of you, stay humble, and don’t get too comfortable on either side. That’s how you survive the market’s many traps — and maybe even make them work in your favor.

Happy trading,
Ben Sturgill

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