What sparked the fall? Nervousness had been building for days on Wall Street. The catalyst was the recent spike in the yield on a closely watched government bond to a seven-year high. The 10-year Treasury note – whose key rate impacts the pricing on things ranging from fixed-rate mortgages to stocks to virtually every financial asset on the planet – recently climbed above 3.25 percent for the first time since May 2011. And when you add the threat of higher borrowing costs on things such as houses and cars and corporate debt to the economic obstacles caused by the U.S. trade war with China, all it takes is a whiff of weakness to set a major sell-off in motion. "We don't know who is to blame here; it's a little like trying to find what or who is responsible for the dangerous hurricane in Florida today," says Chris Rupkey, chief financial economist at MUFG, a Tokyo-based global bank with offices in New York. "But make no mistake about it, the stock market decline, triggered perhaps by rising bond yields, is just as dangerous." SOURCE: USA TODAY.
Dow tumbles over 500 points, bringing 2-day losses to more than 1,300 points. Stocks fell sharply on Thursday in a second straight scary day on Wall Street as investors dumped equities around the globe because of fears of rapidly rising interest rates, a possible global economic slowdown and overly ambitious tech valuations. The Dow Jones Industrial Average closed 545.91 points lower at 25,052.83, bringing its two-day losses to more than 1,300 points. The S&P 500 dropped 2.1 percent to 2,728.37 and posted its sixth straight decline. The broad index also closed below its 200-day moving average for the first time since April. The Nasdaq Compositepulled back 1.3 percent to 7,329.06 and briefly entered correction territory at its lows on Thursday. The Dow fell as much as 698.97 points at its lows of the day. The indexes bounced after a report said President Donald Trump and Chinese President Xi Jinping would meet at next month's G-20 summit, briefly giving traders hope a full-blown trade war with the country could be avoided. October, a month known for major market sell-offs in the past, has been a brutal month for investors so far. The S&P 500 has lost 6 percent during the month so far and is now higher by just 2 percent for 2018. The financials sector was the second-worst performer on the S&P 500, dropping nearly 3 percent. J.P. Morgan Chase fell 3 percent, while Citigroup dropped 2.2 percent. Wells Fargo slipped 1.9 percent. Treasury yields pulled back from multiyear highs, with the benchmark 10-year yield sliding to 3.13 percent. The two-year yield also fell to 2.84 percent. The iShares 20+ Year Treasury Bond ETF (TLT) jumped 1.2 percent as investors clamored into bonds for safety. The major indexes fell after some of the major tech names failed to recover from steep losses in the previous session. Netflix fell more than 1 percent after briefly trading higher. Apple also declined 0.9 percent, erasing earlier gains. Amazon dropped 2 percent after falling 6.2 percent on Wednesday. "It's a momentum correction, not a portfolio correction," said Joe Terranova, chief market strategist at Virtus Investment Partners. "While we have a bias to believe 2008 could happen again, I don't think this is the case." "Less is more in this environment," Terranova added. "I think you need to be an observer of the guidance you get in earnings." Gold futures surged 2.6 percent to $1,224.60 per ounce. The Cboe Volatility index (VIX), widely considered as the best gauge of fear in the market, rose to its highest level since Feb. 12 on Thursday. "As markets slide further and investors seek other safe havens like options for protection, we could see higher VIX levels moving forward," said Jeff Chang, managing director at Cboe Vest. Tech shares fell more than 4.5 percent on Wednesday, marking their worst day since 2011. The sell-off led to the Dow sinking more than 800 points and the S&P 500 dropping more than 3 percent. Run-up in rates Investors had been fretting over a sharp rise in yields fears that rising borrowing costs could slow down the economy. Those fears were quelled slightly by the release of weaker-than-expected inflation data. The U.S. government said the consumer price index rose 0.1 percent in September, well below the expected gain of 0.2 percent. "Net, net, the economy may be running hot, but it isn't fast enough to kick up inflation pressures and calls into question the need for Fed policymakers to move interest rates to higher levels," Chris Rupkey, chief financial economist at MUFG Union Bank, said in a note. The recent downturn in equities comes as investors brace for the upcoming earnings season. J.P. Morgan Chase and Citigroup are among the companies scheduled to report Friday before the bell. Expectations are high for this earnings season. Analysts polled by FactSet expect S&P 500 earnings to have grown by 19 percent in the third quarter. "We look at this as a buying opportunity," said Dryden Pence, chief investment officer at Pence Wealth Management. "I would have my shopping cart out here." "The question is whether the market bounces off a 5 percent or a 10 percent drop," he said. "I think we're going to bounce around here for a while." Thursday's sell-off was accompanied by strong volume. The SPDR S&P 500 ETF (SPY) traded nearly 260 million shares on the day, well above its 30-day average of 72.8 million. SOURCE: CNBC
Looking for a short entry around 2796 and 2775 if market lets it happen. What do you think ?. Morgan Stanley: The stock sell-off is going to get worse. The stock market sell-off is only going to get worse, predicts Morgan Stanley's chief U.S. equity strategist, Mike Wilson. In a note to clients Monday, he wrote that the pain is not over for growth, discretionary and tech stocks, which been the final holdouts until last week. "We continue to believe we are in the midst of a rolling bear market across all global risk assets caused by a drain in liquidity and peaking growth," Wilson said. "Sooner or later, the rolling bear will likely be back for more." On Monday, U.S. stocks failed to bounce back from last week's sell-off. The Dow Jones Industrial Average closed 89.44 points lower, while the S&P 500 fell 0.6 percent and the Nasdaq Compositedropped 0.9 percent. The action followed last week's rout that saw the major indexes suffer their worst weekly loses since March thanks to fears about rapidly rising interest rates and a possible global economic slowdown. Wilson said last week that those rising interest rates served as the "tipping point" for the rolling bear market to finally hit the U.S. and "take out the last holdouts." The move higher in rates is primarily due to the Federal Reserveaccelerating its balance sheet reduction, along with the European Central Bank beginning to taper its quantitative easing program, he said in Monday's note. And he predicts the global liquidity issue is "going to get worse" as the end of the year approaches. However, Wilson pointed out to CNBC on Monday that we're in the "last phase" of the rolling bear market. He predicts perhaps another 10 percent decline in U.S. growth and small-cap stocks, or even 15 percent in some names. He said the S&P 500 could get down to 2,600 or even 2,500 if "it gets really nasty." "That will probably be it for the rolling bear market," he said on CNBC's "Fast Money. "That'll probably be a good place to start buying." He's been favoring value over growth since those stocks have been going down less. "There are names to buy. There's been a lot of damage this year already and some bargains have been created," Wilson said. It's just hard to pick stocks right now because of the liquidity situation, which is a market event, he added. "It's going to be tricky in here the next couple of weeks," he said." — CNBC's Keris Lahiff and Fred Imbert contributed to this report.
U-N-C-E-R-T-A-I-N-T-Y On September 30th, Wealth Research Group commenced on a 3-part series, which continued on October 2nd and October 4th, detailing the reasons that gold and silver are FINALLY indicating signs of a bottom. Gold's price at the time was $1,183, which we see as an important price point that is, essentially, a line in the sand. Silver was priced at $14.20 per ounce. Today, gold's spot price is $1,218 and silver's is $14.60, but we're not anticipating a huge rally anytime soon. However, I want to remind you that during the 1982-2000 legendary U.S. equities bull market, gold had several huge runs, which lasted nearly a year, which is what we could be embarking upon. From July 1982 to January 1983, gold gained 55% in total. Then, from December 1985 to December 1987, it again rallied. This time the total returns were 51%. This happened once more, between September 1989 and January 1990, a swift 4-month run, netting 14% gains. From today's price, a 14% move would bring us to a $1,388 price, while a 55% takeoff, would shock everyone and put us at $1,887, which is above our bull-market target of $1,704 by 2022. In any case, it is imperative to understand how you can control your trading, during the bear market, which is the reason we created this REPORT. Here are some stats that will substantiate that last week's earthquake in equities was extremely severe: In all of its history, the S&P 500 Index has only seen six days, as wild as last week's worst trading-day. The S&P 500 closed below its 50-DMA, which is indicative of oversold conditions. In 30 years, this happened only a dozen times. There is simply a lack of trust between world governments, within governments themselves, among major policy-makers, and, in general. Everyone is stressed out about what other actors in the market are going to do. Before market euphoria, the gains are, on average, 20.41% in 180 days of trading, leading to irrational behavior by investors, who are buying anything. The mainstream media adds fuel to the fire, running shows about the "resurgence of American dominance," which convinces the public that stocks are "invincible" and the rookies eat it up with a spoon, dumping their hard-earned savings when the risk is the gravest. We're not there, not even close. Sentiment isn't that positive, yet. Our price targets for the three major indices remain intact: A. Dow Jones: 31,000-36,000. Currently: 25,339. Potential upside: 42%. B. S&P 500: 3,700-4,300. Currently: 2,767. Potential upside: 55%. C. NASDAQ: 10,200-11,800. Currently: 7,496. Potential upside: 57%. Many variables determine how long and how outrageous the stock market bubble will become, but there is currently no reason for investors to be selling their stocks and move into bonds, so while the multiples are generationally high, it is still not enough to pivot the mothership in another direction. What's also vital to keep in mind is that, as we've shown, the next nine months, the 3rd presidential year, is the best time to own stocks, judging by over 100 years of data. Couple this with the fact that the earnings season is about to begin, and that the mid-term elections will provide some certainty, as to the direction the country is taking, and you got yourself a perfect recipe for a bubble. If you're patient, this is perfect for you. It is like watching someone trying to pick up a girl, making all the wrong moves, so you can be next in line to comfort her easily, opening the way to a great evening with her. The more this bubble goes on, then, the more the commodities bull market will be aggressive, when the paradigm shifts. The S&P 500 is expected to return only 5% annually, going forward, for the next decade. The 10-yr bond yield will probably average 3.5%-4.5% a year, during this same time, while inflation will, most likely, be somewhere close to these annual averages of 3.5%-4.5%. Put differently, you can lend the Treasury Department funds and see your coupon payment get wiped out by inflation, or risk funds in the stock market, only to see 90% of them go towards the hidden tax of inflation. Both options are not attractive, bottom line. In this sort of scenario, I see real assets, commodities, staging a monumental ascent, but we're not there yet. The Federal Reserve will, in all likelihood, raise rates at least three more times, before the cycle ends, which is right about the time the market will go into its 9th inning - its final leg. Before the next elections arrive, the main focal points will be: entitlements, inflation, and recession. The way we see it, the next two years will be the most interesting years of our lives. We expect turbulence. SOURCE: Lior Gantz President, WealthResearchGroup
Emini S&P 500 expectations . I am thinking sideways to up into next week , expect recent low to hold and i am now a buyer of dips after being a seller from 2 weeks back . Vol dropping of Reading all that late to the party sockpuppet bear talk is no help whatsoever fwiw
We're up around 3,1 % from the lows and have retraced roughly 37 % of the down move. It's not uncommon to see some strength after such a move down. Unless it's a full blown crash, markets usually retraces and consolidates. It's easy to forget both in uptrend and downtrends. Personally, I'm not convinced that we're done below yet.
Please don't pay any attention. Long term predictions is pure guesswork on my end and just an intellectual exercise at this point.
OK, lets try to play this together. The signal for a short trade never happened. Now, Scenario 1: I will wait for a weak pullback near 2800 level to see how price behaves around that level to enter a long trade. Scenario 2: If pullback is strong after this move upwards I will wait for a price reaction to the upside showing weakness to place a short trade. This is my idea. Any thoughts are welcome.