Stocks and Precious Metals Charts - Worst Day For Stocks Since 2011 - What We Need Is Even More of the Same

"It is not possible to found a lasting power upon injustice, perjury, and treachery. These may, perhaps, succeed at first, and limp along on hope for awhile with a flourishing appearance. But time betrays their weakness, and they eventually fall into ruin of their own designs."

Demosthenes


"Monetary and regulatory policy encourage asset bubbles to proliferate. Hot money seeks out the conscious mispricing of risk.  Capital, in the form of both money and personal talent, increasingly flows into malinvestment and the gaming of markets.  The productive economy languishes, left wanting for the lack of creative resources and attention.   The bubble rises to unsustainable valuations— and fails, and a nation's capital is consumed."

Jesse 5 August 2019, The Men Who Sold the World


"This is going to end badly.  Big changes are coming.  What has been hidden will be revealed. Rough seas ahead, mateys."

Jesse, 22 January 2020, I See It Coming


"It is precisely this — high-powered computers and the swagger of those who operate them — that is causing worries over high-frequency trading’s increasing sway. 'The markets used to be about capital formation,' said Mr. Quast, the consultant. 'Now 80 percent of trading is driven by some form of statistical arbitrage. We are buying into a statistical house of cards that could unravel very quickly.'”

Landon Thomas, Inquiry Stokes Concern over Trading Firms that Shape Markets, 3 September 2009


“They were careless people, Tom and Daisy — they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made.”

F. Scott Fitzgerald, The Great Gatsby

Stocks were utterly hammered today, with the stock futures going out on the lows, and continuing to fall in selling after the bell.

Let's see, are we going to blame Bernie or the Deep State or CNN today?

Or maybe just the Fed.

The Fed certainly is culpable to a degree, again, because they went all in for not-QE in the 4th quarter, bending to pressure from the White House and the Banks, mostly the Banks.

And after the last crash the Fed held up their hand and kept volunteering for more and more regulatory responsibility.

They and their cronies and paymasters put the cherry on the top of this bubble.  Until it was just a matter of what trigger event was going to set it off.

Despite the spin and narratives, the financial system, like the rest of the economy, was interconnected, over-extended, poorly regulated, and fragile.

And the coronavirus is a big cherry on top, despite the self-serving happy talk being put out about it by the usual suspects in politics and the media.

And who could have seen it coming?

Not you, if you get your news from conmen and spokesmodels for the oligarchy.

We are very oversold here for the short term.  And a bounce, like the ones that they attempted to provoke the last couple of mornings, is possible.  And it might finally stick for a day.

Let's see if the Fed and Treasury step in and tries to save this bubble.  I am sure Trumpolini has Mnuchin and Kudlow on the job.

The longer term damage to the nation is going to tax the future for the working public.

The Dollar finished lower.  Silver was off a bit.

Gold was off $3 per ounce today.  Gold, unleveraged is a safe haven.

Things are going to be getting very real this year, even as some continue to deny reality, to an almost astonishing degree of self-absorption and denial.

What is it going to take?

Have a pleasant evening.

Stocks and Precious Metals Charts - Sooner or Later a Crash Is Coming— and It May Be Terrific

"It looks like we might have another blow off top in the works.   The tech sector was rampaging higher today.  When in doubt break glass and recycle the last bubble.  Let's see how much more these jokers can squeeze out of this."

Jesse, Le Cafe Americain, 21 March 2019


"My cyclical calculations and trend forecasts suggest that July 2020 may be a decisive, if not pivotal, period in our time. I think I may have mentioned this once or twice before."

Jesse, Le Cafe Americain, 26 February 2019


"It's probably early days, but now might be the time to start taking precautions against a 2008 class event in the financial markets.   I would suggest it might arrive anytime between now and July 2020.  These sorts of things depend on the magnitude of any 'trigger event,' which is why it is so difficult to forecast with regard to specific dates.  As time goes on the required force for a market moving event decreases until it takes very little to set that ball in motion."

Jesse, Le Cafe Americain, 24 July 2018


"Sooner or later a crash is coming.
And it may be terrific."

Roger Babson, Sept. 15, 1929

The antics in support of the Levi-Strauss IPO in the market yesterday were just begging to be shorted into the close.  And I did.  And cashed in today.  I do not trade short term in size much anymore, but sometimes they do almost ring a bell, and it is hard for an old hound dog to just keep laying on the porch.

The US Treasury Yield Curve inverted today for the first time since 2007.  The talking heads were stumbling and mumbling about it.   They just cannot imagine what is coming.

Timing a big event like this is brutal, since there are so many exogenous variables.  And forecasting a notoriously low probability event is rather difficult, even when the probability becomes relatively more probable.

We may move even higher in this markets asset bubble.  Heck, we could even see a real monetary driven asset inflation before this is over, even if there is virtually no organic inflation because of the skewed and corruption financial system.  

But with respect to timing I still like my longer running forecast, suggesting we will see a genuinely significant downside event in the markets, and perhaps in the socio-political system, by July 2020.  although now that seems like an 'outside' date for it.

If December 2018 was really a market 'break' in the manner of March 1929 then we may not even make it to October of this year.

Gold showed the kind of resilience today that one would look for in a safe haven asset.  It moved higher with the Dollar  But keep in mind that in a liquidation event even gold is likely to take a hit. Likely, but it will recover more quickly than most other assets.  Silver will tag along, weighed down by its industrial component.

It appears as though Theresa May has obtained a Brexit reprieve of sorts from the EU. Let's see if we can reset our counter as the situation clarifies.

Let us remember the poor people along the Missouri River who are being flooded out, thanks to the aging and inadequate levees which have crumbled.  We all know why we can't have nice things like the rest of the developed world.   After all, sacrifices must be made.

I am pleased to let you know that another Englishman will be recognized as a saint.   John Henry Newman has been named for canonization, although the exact date for this has not yet been given.   I have been praying and quietly supporting the cause for this since 1983.   And now it seems as though it is finally here.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant weekend.

Update on the CrashTrak Equity Profile - A Banquet of Consequences Part II

"One of the most disturbing facts that came out in the [Adolf] Eichmann trial was that a psychiatrist examined him and pronounced him perfectly sane. I do not doubt it at all, and that is precisely why I find it disturbing.

If all the Nazis had been psychotics, as some of their leaders probably were, their appalling cruelty would have been in some sense easier to understand. It is much worse to consider this calm, 'well-balanced,' unperturbed official conscientiously going about his desk work, his administrative job which happened to be the supervision of mass murder.  He was thoughtful, orderly, unimaginative.  He had a profound respect for system...

The sanity of Eichmann is disturbing. We equate sanity with a sense of justice, with humaneness, with prudence, with the capacity to love and understand other people. We rely on the sane people of the world to preserve it from barbarism, madness, destruction. And now it begins to dawn on us that it is precisely the sane ones who are the most dangerous...

The whole concept of sanity in a society where spiritual values have lost their meaning is itself meaningless."

Thomas Merton, Raids on the Unspeakable

When you have allowed sociopaths to erect a system which rewards expediency, cleverness, and winning without regard and respect for human values, fairness, or even common mercy and the dignity of others; a society which views compassion and a sense of justice as a weakness to the point of a dangerous deviancy; a culture in which harshness and crudeness and the abuse of power in pursuit of even more wealth, or of the weak as an enjoyable diversion for the superior, are enshrined with a sign of growing strength the only virtue— with such role models and rewards, what else would you expect the highly educated but spiritually weak-willed and morally ambivalent professionals among you to do?

They will implement and execute to plan, under the cover of playing within the rules of a rigged game, with an efficient and myopically determined focus as they do with all that they undertake. They will march themselves into hell with a deluded sense of pride and high accomplishment.

And where do you think this madness will end?

If the bulls cannot stop the selling, put in a bottom, and turn this around we might be in for something notable.

Hopefully the bulls will be able to get their act together to at least stop the selling as they square up their positions into the holiday.

I have to say that I am not 'feeling the fear' yet and the safehavens are notably quiet.

And it would not take a lot to turn the market higher. A word or two from Trump, or one of his proxies, or the Fed's Jay Powell would likely do the trick.

The risk in that is, of course, that if they give it a go and it does not stick, then after an initial bounce the market may take another leg down with a vengeance.   And once the panic sets in, and the real fear selling is underway, it may be too late for jaw-boning to work, even if one if wielding the jawbone of a truly formidable donkey.

I have started to populate the spreadsheets I made in 2000, and last used in 2007, which track the movement of this market and compare it with significant declines from the past.

I have been underestimating the volatility in the NDX using eyeball measures on the chart. One really needs to plug the numbers in.

This is a light trading week. If the bulls cannot turn it on Wednesday or Friday then their hearts may not be in it.

The market is not dominated by 'value investing' but by momentum traders and algos. In that sense it is vulnerable to an outsized move, both up and down.

If there is a 'crash' as I noted some time ago there is little doubt it will be blamed on Trump's trade policies, and to some extent Brexit. This would be a coup for the globalists and freetraders.

They will never acknowledge that the Banks and their Fed willfully allowed an asset bubble to grow, for the third time, in order to continue the transfer of wealth to the top under the guise of investment and asset allocation.

When I dropped my son off at the airport I told him the stock market may crash while he is there, but not to be concerned because I have made provisions.

You may wish to do so as well, even though I still think a crash is a low probability event.

See you tonight.

Stocks and Precious Metals Charts - The Greatest Show On Earth - A Banquet of Consequences, Part I

"It's probably early days, but now might be the time to start taking precautions against a 2008 class event in the financial markets. I would suggest it might arrive anytime between now and July 2020. These sorts of things depend on the magnitude of any 'trigger event,' which is why it is so difficult to forecast with regard to specific dates. As time goes on the required force for a market moving event decreases until it takes very little to set that ball in motion."

Jesse, 24 July 2018


"Welcome to October, the month of unexpected falls from heights, and stock market tears."

Jesse, 1 October 2018


"The VIX futures were in contango today. That means that the nearer term months were at a higher value than the following months. Usually it is the other way around. backwardation, with the futures in the following months gradually increasing in price. This is a signal that a nearer term and disruptive spike in risk is being expected by a number of traders, and they are seeking protection from it.

If you look at the NDX futures chart below, you can see how every day for the past three days that the futures have slumped heavily lower, recovering a bit in the afternoon while Asia and Europe are asleep, only to drop sharply again the next day, and fail to completely recover.

Stocks may turn around and rally higher from here. But the risk for equities is pronounced."

Jesse, Monday, 8 October 2018


“We have been in a state of stagnation since 2008.  We’re moving towards stagflation.  It feels good right now but it’s a false dawn.”

Alan 'Bubbles' Greenspan

Ba da bing, ba da boom.   Le voilà.

Stocks were down sharply on very heavy volumes. They went out near the lows of the day.

Today was the kind of day when you could almost feel your IQ start to decline from listening to the spokemodels and guest commentary on financial television—   a 'contact high' of hubris and self-delusion.

We can always hope that our tax cut flush companies will start buying their own stocks again once earnings season is underway and they make their announcements.

We may get a decent attempt to rally back up some time, likely after some follow through to the downside. The ESF might take a shot at it tomorrow, but if these volumes keep distributing to the downside I don't think they have enough ammo to turn it around. They might have to wait for a capitulation first.

The 2770 level on the SP 500 Futures chart looks like an important support level.  Below that the bulls will need to start taking Xanax if they break 2740 and stick a close below that.

If the market turns and puts a multi-day rally together, and starts approaching this last blow off top, and it fails, look out below.

Either way, there is most likely much worse to come with time. That we expect something different is remarkable, a genuine triumph of modern persuasion, the power of dark money, and old-fashioned demagoguery.

Need little, want less, love more. For those who abide in God abide in love, and love in them.

Have a pleasant evening.