The Day the Music Died

Wednesday May 22 2013

Bye, bye Miss American Pie
Drove my Chevy to the levee but the levee was dry
Them good ole boys were drinking whiskey in Rye
Singin' this'll be the day that I die
This'll be the day that I die

Don McClean, Bye Bye American Pie

Today was highly significant. We have been writing telling you that 

The Great American Recession has begun

 A huge Deflationary Wave is being telegraphed by weak gold and silver prices

We are back to the All One Market Theory as the Dollar becomes, John Murphy's comment, the strongest currency in the world. 

Okay let's start with stocks.

On the thirty minute chart stocks took out four moving averages in one day after staying above them for the last month, case closed, the top is in. A reader asked about my positions - cash with some gsb exposure. 

Bonds

30 year yield, screaming to the upside

Today was an outside reversal day to the upside in yields. We pegged 3.4-3.6 % as the line in the sand for yields. Ben thinks he is in charge, not so Ben ,the market is in charge, you are just a player, not the player.

Currencies

Aussie Dollar 

The Australian government wants a lower currency value, it is about it get that in spades. The Aussie Dollar collapses as the US Dollar in the lower panel continues to advance. 

Crude oil

Crude oil is down three dollars in two days, note the third lower high in crude oil. This has huge implications for the current Shale Boom but no one in the oil business seems to realize this. Teh XEX energy service ETF was down 1.95%. 

Gold

Gold had a huge $60 range today, And it was down on the day. The rise in the US Dollar and the collapse in the Canadian and Aussie Dollars, suggest that  hopes for a bottom in gold are unfounded. I have enjoyed corresponding with Steve Kaplan but I must disagree with his conclusions/  Deflation is about to over take the world economies. Bernanke's plan for dropping dollars from helicopters did not work. All it did was promote stock and real estate speculation making it appear that things were getting better. 

 

I will update again tomorrow morning.