The annotated chart linked below shows that on Friday there was no place for investors to hide. Stocks (large caps and small caps), bonds, emerging markets, gold, silver, oil and most commodities all fell simultaneously in a fashion similar to 2008 and early 2009. Even if we get a reversal from Friday’s selloff, this is an important event that warrants prudent investors to take protective steps. Let us first develop better understanding and then discuss potential steps.
Please click here for the annotated chart comparing stocks, bonds, gold and oil.
The chart compares ETFs representing the S&P 500 SPY, bonds TLT, gold GLD, small caps IWM, the Nasdaq 100 QQQ, silver SLV, oil USO, and emerging markets EEM.
Many key insights will jump out quickly at those accustomed to looking at inter-market analysis charts. For those not accustomed to these, I highly recommend to not only read the annotations but carefully look at the chart for several minutes to gain new insights.
ECB tea leaves
On Thursday, before the market open, the our Morning Capsule was titled “Stocks To Drop As Market Reads Tea Leaves From Super Mario’s Statement.” There was also a call for bonds to drop. It also stated that our very, very short-term early stock-market indicator was negative.
The trigger for the call was a conference by Mario Draghi, Chief of European Central Bank. Draghi is also known as Super Mario due to his ability to move markets higher just by talking. However, listening to him, it was obvious to me that this time it was different.
The ECB left all three rates unchanged as expected. ..Read more at MarketWatch
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