Tag: Stock market crash

U.S. Futures Plunge ~2.4%, Extending Overnight Losses, Gold Soars, As Covid-19 Contagion Craters Complacency

Update 5:05AM EST:

The overnight bloodbath in U.S. futures picked up steam about 3AM Eastern Time, despite China’s A Share market ending the session down just 1.31% and the SZSE Component finishing its session actually higher by 1.23%.

And despite Trump touting an Indian trade deal and hilarious headlines that hit around 5AM EST that the U.S. “doesn’t expect any Phase I trade deal impact from the virus”, Dow futures fell more than 700 points and gold is now just about 10% from its all time highs.

As of 5:05AM EST:

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* S&P futures -79 to 3260, -2.37%

* Dow futures – 724 to 28258, -2.49%

* Nasdaq futures -280 to 9178, -2.98%

* Gold futures +34, bid to 1682, +2.07%

* USD/JPY -.229 to 111.31, – 0.21%

Of course, traders at the NY Fed are still probably just waking up, so we’ll reevaluate how things look heading closer into the cash open.

Continue reading “U.S. Futures Plunge ~2.4%, Extending Overnight Losses, Gold Soars, As Covid-19 Contagion Craters Complacency”

The Crash Party

Authored by Sven Henrich via NorthmanTrader.com,

Since 1900 markets have had their fair share of crashes. Mind you crashes don’t happen that often, in fact crashes are very rare. You know what’s also very rare? A particular party being in power preceding crashes. Every single time, making them the crash party.

Oh don’t start hating on me. This is not a political post, but I know how tribal politics are these days and you say one thing about anyone or party you get hammered. For the record: I’m not a Republican and I’m not a Democrat. Tribalism, parties, clubs, it’s just not in my DNA. I’m an independent or outsider or whatever label fits.

Continue reading “The Crash Party”

Ticking Time Bomb: Is This Powell’s “Subprime Is Contained” Moment?

Authored by Sven Henrich via NorthmanTrader.com,

I’m of the long standing view that Fed chairs have one prime responsibility above all others: Keeping confidence up, and if it requires to sweet talk problems then that’s what it takes.

The often classic quote by Ben Bernanke of “subprime is contained” right before it blew up in everybody’s face being a prime example.

Is the Fed that blind to reality or just on an elaborate marketing mission to ensure that nobody panics and sells stocks? I leave that judgment to the reader.

But I can see differing messaging coming out the Fed when people are in office and when not.

Take corporate debt for example.

Continue reading “Ticking Time Bomb: Is This Powell’s “Subprime Is Contained” Moment?”

Market In Turmoil: Gold Spikes, Yuan Crashes, Stocks Plunge As Asia Opens

Via ZeroHedge

In early Asia trading, offshore yuan has extended Friday’s collapse, testing the lower edge of the PBOC’s Yuan trading band once again.

Yuan traded as weak as 7.1925 against the USDollar…

Source: Bloomberg

Continue reading “Market In Turmoil: Gold Spikes, Yuan Crashes, Stocks Plunge As Asia Opens”

QUOTES OF THE DAY

“During the Summer of 1929 the stock market was marked by wild swings, violent up and down price movements, that left market participants feeling dizzy and almost exhausted. Whatever may or may not come, now might be an excellent time to take inventory of your finances, and provisions for the future. And you may wish to order your affairs to be more resilient in the face of risks, both hidden and mispriced.”

Jesse 10 August 2019

“The narcissist devours people, consumes their output, and casts the empty, writhing shells aside.”

Sam Vaknin

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Is the ‘everything bubble’ finally popping? This chart might have the answer

Via Marketwatch

The stock market was in shambles to start the week, with the Dow Jones Industrial Average DJIA, +0.42% dropping more than 700 points after China retaliated against President Trump’s latest move in the intensifying trade war.

Charles Hugh Smith, known for his Of Two Minds blog, like many other market bears, has been calling for a painful end to this bull run for a while now.

“Nothing the Fed could do will restore a fragile, speculation-dependent, debt-bubble economy to any sort of health,” he wrote. “Whatever the Fed does, it further distorts a massively distorted system, increasing the odds of a catastrophic re-set.”

Continue reading “Is the ‘everything bubble’ finally popping? This chart might have the answer”

Why We’re Raising Our “Crash Alert” Flag

Guest Post by Bill Bonner

POITOU, FRANCE – Watch out, Dear Reader, this could be a tough week for investors.

Investor’s Business Daily reports:

Dow Jones futures sold off sharply Sunday night, along with S&P 500 futures and Nasdaq futures, as China’s yuan tumbled to a record low. That follows a tough week for the current stock market rally as new Trump tariffs escalated the China trade war.

So far, the big, fat, ugly Dow has sat on the wall and stubbornly refused to tumble. But last week, Donald J. Trump gave Humpty a shove.

He turned up the Trade War Dial, from 1/2 retard to 3/4 retard. China retaliated with its own version of retard, cutting agricultural purchases from the U.S. and letting the yuan fall.

Continue reading “Why We’re Raising Our “Crash Alert” Flag”

Time to Change Strategy

Guest Post by John Mauldin

My recent letters described what I think the future will look like. I hasten to add, it isn’t what I think the future should look like or what I want to see. Almost the entire developed world has painted itself into a corner.

It won’t necessarily be terrible. I don’t expect another Great Depression or economic upheaval, but we will have to adapt our portfolios and lifestyles to this new reality. The good news is the changes will happen relatively slowly. We have time to adapt.

In war movies, it’s common for the dashing leader to make bold promises like, “We will never retreat!” ahead of a glorious victory. The assumption is that retreat is bad. But real-life military strategists say retreat can be the right move. When the odds are against you, better to save your ammunition for another time. Better yet, adopt a new strategy that gives you a better chance.

My last few letters may look like retreat, but I’m just recognizing reality. There is no plausible path to stopping the world’s debt overload, much less paying it off, without a serious and painful purge. If you know of such a path, please share it with me, but I haven’t seen one. So I foresee a tough decade ahead.

Summing up:

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FUTURES DOWN 500

There are three principal phases of a bull market: the first is represented by reviving confidence in the future of business; the second is the response of stock prices to the known improvement in corporate earnings, and the third is the period when speculation is rampant – a period when stocks are advanced on hopes and expectations. There are three principal phases of a bear market: the first represents the abandonment of the hopes upon which stocks were purchased at inflated prices; the second reflects selling due to decreased business and earnings, and the third is caused by distress selling of sound securities, regardless of their value, by those who must find a cash market for at least a portion of their assets.
– Robert Rhea, The Dow Theory, 1932

Charles Dow once wrote, “To know values is to know the meaning of the market.” That quote may surprise trend-followers and adherents of technical analysis, because Dow’s work is often squeezed into a caricature focusing on nothing more than confirmation and divergence across the Dow Jones Industrial and Transportation averages. But Dow’s actual views, best elaborated by writers like Robert Rhea and William Peter Hamilton, were actually about something much more fundamental: identifying the position of the market in its complete bull-bear cycle. That’s a concept that investors have forgotten, encouraged by the illusion that the Federal Reserve’s buying of Treasury bonds is capable of saving the world from any form of discomfort. That illusion is likely to prove costly.

Continue reading “You Are Here”

QUOTES OF THE DAY

“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

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Markets aren’t really recovering from the US-China trade war – this is just a dead cat bounce

Guest Post by Andy Xie

The markets are celebrating the pending agreement between China and the United States to end the trade war. This follows the US Federal Reserve signalling a pause in raising interest rates.

The euphoria is bringing the bulls out of hiding. Unfortunately, this is likely to be a dead cat bounce. A global slowdown is in full swing and with it, an earnings recession. Even if another major financial crisis could be averted, the debt binge of the past decade would take a long time to digest.

The change in the Fed’s policy posture is probably more important than a resolution to the trade war. Trump was raging that increased interest rates had crashed the market, and the falling market threatened to trigger another debt crisis.

Continue reading “Markets aren’t really recovering from the US-China trade war – this is just a dead cat bounce”

Crash Signatures

Guest Post by Jesse

If you have been a long term reader here you know that I have something called a ‘Crash Signature.’

One of the key components of this is a significant decline from a new all time high, that rallies substantially so that the fear subsides and most believe there is a return to ‘normal’ bubble conditions.

Unfortunately, IF this is a rally that fails, in that it fails to set a new high, but tops out and then falls sharply again, we have a higher potential of a crash in which confidence is shattered and a new lower low is set.

I have a correspondent in France who also does trend tracking such as this. While I have normally been using a composite model of several crashes from US market history (1929, 1974, 1987, 2001, 2008) he is concentrating lately on a comparison to the year of 1937.

Continue reading “Crash Signatures”

The Freak Chart

Guest Post by The Northman Trader

I got a freak chart for you that’s stunning, but bear with me here because it requires some background and patience. Most of us are focused on the daily or weekly action and it’s easy to lose sight of big cyclical trends. We don’t think of them as they take a long time to unfold and the daily noise is so much more dominant.

With the advent of permanent central bank intervention sparked by the financial crisis all of us have come accustomed to markets always going up with the occasional correction in between and the timing of corrections have seemingly become shorter and shorter. Big fat bottoms that happen after just a few days of temporary terror. We haven’t seen a true bear market since the financial crisis and even that one lasted barely more than a year as central banks stepped in. The last longer term bear market came after the technology bust in 2000 when markets bottomed in 2002 and 2003 and then proceeded onto the next bull market.

Continue reading “The Freak Chart”

2019 FROM A FOURTH TURNING PERSPECTIVE

“An impasse over the federal budget reaches a stalemate. The president and Congress both refuse to back down, triggering a near-total government shutdown. The president declares emergency powers. Congress rescinds his authority. Dollar and bond prices plummet. The president threatens to stop Social Security checks. Congress refuses to raise the debt ceiling. Default looms. Wall Street panics.” – The Fourth Turning – Strauss & Howe

Strauss and Howe wrote their book in 1996. They were not trying to be prophets of doom, but observers of history able to connect events through human life cycles of 80 or so years. Using critical thinking skills and identifying the most likely triggers for crisis: debt, civic decay, and global disorder, they were able to anticipate scenarios which could drive the next crisis, which they warned would arrive in the mid-2000 decade. The scenario described above is fairly close to the current situation, driven by the showdown between Trump and the Democrats regarding the border wall.

It has not reached the stage where all hell breaks loose, but if it extends until the end of January and food stamp money is not distributed to 40 million people (mostly in urban ghettos) all bets are off. The likelihood of this scenario is small, but there are numerous potential triggers which could still make 2019 go down in history as a year to remember.

Continue reading “2019 FROM A FOURTH TURNING PERSPECTIVE”

A Horrified Wall Street Reacts To The Mnuchin Massacre

Via ZeroHedge

Heading into December, a majority of traders still quietly hoped that the volatility observed in October and November would finally fade, and give way to the traditional Santa rally allowing them to escape what in just two months had mutated into a devastating year for most, unscathed: after all, in the past century, December has not only been the month with the highest average stock market return, but the month which has closed in the green on 74% of instances, the most of all other months of the year.