Tuesday June 14 pre market Open
All the thiings we have discussed here for months are now coming true, and faster than most expected.
Selling accelerated into the close yesterday
The NASD NDX have fallen the fastest recording a 4.6% decline just yesterday. An article in the WSJ describes how this is robbing retirees of what they thought would be a comfortable period. No kidding.
NDX has much further to fall before PMO on the 4 hour chart bottoms.
Ditto for the SPX
William DeVane has been touting gold on cable tv as a hedge against everything but that bet is not working out.
Gold
The double top is making for big resistance around $2,100. the MAs are converging which happens prior to a trend change.
Higher interest rates make the cost of carrying gold expensive, and it pays no dividends.
Silver made its double top earlier and is now in a clear decline already approaching the 200 week MA at 20.42.
the sell offs in so many asset classes is quickly deflating what investors thought was a store of value. Cohen and Steers reIT is down form its January 0eak of 76 to 58 in just five short months.Iron ore producer CLF has dropped form 34 to 18 since early April. While one might think inflation would keep iron ore prices high, this is telling us to expect extreme economic weakness in in the near future, the lack of demand for basic metals. Interest rates are nearing a peak and will then retreat giving a fase sense of hope for the clowns at the FED.
30 Year Yield - the reversal of the 39 year market in falling yields has been swift, apprently no one at the fed has a long term chart of yields.
Refiner Valero dropped 6.3% Monday. We suggested two weeks ago that energy prices might weaken and this is a sign that may be finally underway.
Long Term Perspective
The overall bull market since the 1982 low has had numerous setbacks like the dot.com and sub prime mortgage sell offs. But those were relatively short term,say three years in the overall trend. Most investors today have not experience a prolonged period of stagnation like 1972-1982 where the DJIA never returned to its 1,000 high. Hence most will not sell to avoid the huge losses which lie ahead. This will further the econoomic hardship and finally destroy the buy the dip mentality.
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