Things were out of control last week, and they continued to ramp up even more on Friday. Now, here we are Sunday night, futures just opened, and the stock indexes are down over 4% and falling fast and hard, oil is plummeting down over 25%. Oil dropped over $10 and is now at $30 per barrel.
Gold and bonds are moving higher by 1.5% each, nothing huge, but they are the safe havens.
On Friday, I talked about how the market just entered a level of extreme volatility and how prices could go haywire and will be very unpredictable. All this unfolded right when out TLT bond trade reached our max price target of 20%. It’s incredible how charts can pinpoint key turning points or volatility levels weeks, and even months ahead of time just like TLT trigger did.
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Bonds could have another 5-10% pop here as the market gets flooded with buy orders, but this is a panic spike, so it could last a few days but should come back down to below Friday’s price at some point.
Gold, silver, and miners could very well likely get smashed with another round of margin calls, and they collapse again, this is the issue with strong selling, it sucks metals down with it at times.
As much as I hate to see huge moves in the market that we are not taking part in, this type of price action is crazy. This is excellent trading for those who are scalpers or day traders, but swing trading is out of the question when assets are opening higher or lower 5-25% day after day.
I can only imagine what Trump and the Fed are thinking right now, im sure they are in panic mode and on the phone with experts asking what they can do to stop the drop. I feel the FED made a big mistake dropping rates 0.50%. Everyone I speak with feels the same way, which is the FED knows things are super bad and overreacted, dropping the rate too much, and that has us all spooked that this market crash could be just the tip of the iceberg.
With all that said, Friday looked and felt like a significant low, and tonight’s drop, I think, maybe an exhaustion washout low, and it is higher from here.
Just be happy you are in cash watching VS being in a panic!
Chief Market Strategist
Technical Traders Ltd.