Blue Monday, not Black Monday, as U.S. equities are "only" off 4% as I type. Nice to see the complete panic in the eyes of the stockroaches for once, though.
What an overnight and morning we've had! China was down 8%. U.S. equity futures had to be temporarily halted a few times to slow the panic. Once the NYSE finally opened, I saw it down as many at 1080 points before it bounced. And, it was so bad that I actually heard Bob Pissonme say that a close down only 600 "would be a victory".
All the while, my stack just gets getting shinier and shinier...
Things are moving fast, so, please bear with me as we go along. At present, I have the DJIA down 415...I think. I say "I think" because things are moving so fast, that quotes are delayed and neither my computer nor phone can seem to keep up. The 10-year note os at 1.92% and The Long Bond is all the way down to 2.64% Crude saw a low a few hours ago of $37.78 and all of the other commodities are down.
This is global disinflation bias overload leading to general liquidations. Gold is mostly flat, though volatile, and silver has been down as much as 4%. However, it DID find a bid near the same level it bottomed last Tuesday and it has since rebounded back over $15.
Again, things are moving so quickly that there's not much time for analysis. Just a recap and some support lines. We'll get more into the big picture stuff during today's podcast.
Gold is $1160 as I type and unchanged on the day. It has been as high as $1169 and as low as $1152. If a big liquidation hits, look first for some support near $1130 and then again at $1105. Resistance remains at $1170 and then $1180.
And now the Dow is down 444....
Silver fell sharply as an industrial metal again today, at one point down over 4% at a low of $14.56. It has since recovered with the other commodities as I have a last of exactly $15. Keep watching the $14.60-$14.85 area as support and look for a bounce soon as a monetary metal, instead.
Through the carnage today, the primary item of particular importance for all of us in Turdville is the HUGE rally in the yen today. Though down from its panic highs, the yen is still UP almost 3% versus The Pig. As mentioned late Friday, this is very, very significant for a number of reasons. On the chart below, note that the yen has now broken the 3-year downtrend from October 2012...this was when QE3 began and gold also began it odd, counter-intuitive move down. As we've discussed ad nauseam, this gold--yen link drove the hedgies and trading funds to do a lot of the daily dirty work for The Banks as gold prices we're driven repeatedly lower, following the yen down.
That the yen has broken this downtrend tells you one very important thing that NO ONE is yet discussing...QE4 is coming!!! And with it, a total loss in all credibility in The Fed. The yen fell for three years as "the market" figured the BoJ and the ECB were the only central banks that were going to keep the QE machine going. The USDJPY is now telling you that it's all over. There will be no rate hikes. There will be no "normalization". THIS IS A HUGE DEVELOPMENT/CHANGE. Again, more on this in today's podcast.
And now the Dow is down 480...
By breaking back above 1.140, the euro is confirming this, too. Again, think about the incredible significance of this. Gold has been smashed for three years in dollar terms because of "the market's" perception that QE is over and that The Fed was moving to taper and end QE and then normalize rates...and, as we've known all along...it was all complete BS! They were NEVER going to raise rates because they can't. And now, the yen and the euro are finally beginning to understand this. IT IS NOW SIMPLY A MATTER OF TIME BEFORE PAPER GOLD AND SILVER REFLECT THIS REALITY AS WELL.
And unless The DJIA recovers about 1000 points before Friday and the end of the month, the S&P is doomed to a major drop in the months ahead. After a dead cat bounce, likely back toward 2000 in the S&P, the target will become 1,500 at a minimum. That's a 25% drop that the stockroaches will have to eat and it will sure be entertaining to listen to all of the wailing and grinding of teeth as it happens. For now, the DJIA is still off 485 as I type.
MUCH MORE LATER,