Well that escalated quickly…
China was “stable” overnight (but won’t be when it opens tonight)…
European stocks were pummeled lower today…
In Italy, Ferrari and Pirelli plunged and were halted Limit-down... with China cracking down on luxury goods and broader auto fears…
EU and US Autos have plunged…
With Ford trading with an $8 handle at its lowest since Nov 2009
S&P longest losing streak since Nov 2016… Nasdaq down 4% worst day since Brexit…
As Bloomberg notes, today is the fifth straight day of losses in the S&P 500. That’s the longest streak of declines since President Trump was elected. Even the correction in the February and the retest in March didn’t go in a straight line like this. So far, the damage hasn’t been too bad, however. The S&P 500 is down only about 2.4% in those five days and only about 2.6% from its last record in September.
October…
Dow drops over 800 points at its lows and appears to confirm the double top…
Trannies are now red YTD…
Technical Levels are falling like flies…
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Dow < 50DMA
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S&P < 100DMA
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Nasdaq < 200DMA
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Small Caps < 200DMA
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Transports < 200DMA
Tech stocks took in on the chin…
FANG was proper f++ked…
NFLX and FB now in bear markets (down over 20% from highs), FB down over 10% from highs…
Equity market breadth is a disaster…
VIX spiked above 22…
The VIX term structure is the most inverted since April…
Quite a shift in the last week…
Before we leave stocks – here are a few charts to help put the move in the S&P in context…
Hedge Funds…
Financials…
Semis…
Homebuilders…
Autos…
Materials…
Dr.Copper…
And the real economics PhD – Dr. Lumber…
And finally, Credit markets are starting to get monkey-hammered…
And in case you’re wondering what’s holding up the S&P…
Despite credit and equity carnage, bonds were not ‘safe haven’ bid as the long-end reversed yesterday’s gains…but as stocks accelerated lower, bonds did catch some buying, leaving the entire curve lower in yield on the week…
However, we do note that today’s selling pressure failed to make a new 30Y high (yield)…for the first time in 8 days
The yield curve reversed steeper today, erasing yesterday’s flattening…
NOTE – 10Y Yields dropped notably in the last hour as selling accelerated in stocks…
The market is still not buying what The Fed is selling…
The Dollar Index managed a small gain on the day but had another roundtrip session…
Offshire Yuan tumbled…
Cryptos are generally unch on the week aside from Ripple’s Collapse…
Crude and Copper were clobbered as PMs caught a safe haven bid…
Finally, we note that the Fear-and-Greed index has swung from the latter to the former in near record time…
1987? Or The Titanic?
Just as an iceberg loomed in the distant darkness to be struck by the Titanic under full steam, so the US economy approaches the distant fiscal drag of 2020 under the full steam of rate hikes to contain inflation and an overheating labor market.
— Scott Minerd (@ScottMinerd) October 10, 2018
We give the last word to an old friend who seemed to nail things perfectly…
Another 2% down in spoos and Powell can start putting his coffee cups and pencils in a cardboard box
— Not Jim Cramer (@Not_Jim_Cramer) October 10, 2018
