The Silence is Deafening

We have seen a big drop in the markets and it has put our Macro Algorithm in play, see chart here.

Why is everyone so quiet today?

What we see is a market that is sitting in a big chasm, does it try to get back up and go higher, or does it roll down the mountain. This is a quiet period for it, a time to think. While the chart above shows the raw influence line having taken a big dip, the trigger line has not yet crossed the signal line, a sign that would indicate much lower stock prices. It would have taken markets to be down over 25 % today, from the highs, for that to happen. However, a week from now, if the markets don’t rally, you can get a trigger for a major sell signal at these price levels.

In the background news it is well known that most of the upside move in the stock markets since March has been driven by the overnight CME futures markets. Who has been behind this manipulation is a big question. There are a lot of rumors out there, it will be interesting over what comes out from the CFTC, CME, and probably SEC over the next few months.

Most Important – the August 7 Economic Apex Update at 12:00 Noon today.

Go back and look at our posts around that day. That was the day we dumped our long Gold and Bond positions as the Macro Algo chart flipped. Here is where we are at the moment since that date:

20 Yr Bonds (TLT) – 4.5 %

Gold – 6.7 %

Commodities (CRB) + 0.5 %

Corp Junk Bonds (HYG) -0.8 %

S&P 500 + 1.8 %

Nasdaq 100 (NDX) + 2.2 %

Here is what is interesting. Something happened on August 7, something the stocks have not addressed, my guess is that it is debt related. The happy talk people no doubt want to push the story that what has happened is due to the anticipation that the Old Normal is coming back.

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