“Fragility is the quality of things that are vulnerable to volatility.”- Nassim Taleb
Lately we have been seeing one day of a mad rally higher, followed the next day by a stunning reversal lower.
Today, they decided to break the mold and do both up and down moves of surprising breadth in the same day, in response to little or no new information.
Stocks were climbing higher from the start today, for no particular reason it appears, other than the desire to buy the dip. It was a fairly well-ordered but impressive move higher
But then about one o’clock today, the bulls seemed to lose their nerve, and the selloff began with the same quiet but relentless selling, taking stocks back down to nearly where the whole thing started.
Gold and silver caught a little bit of a bid, and managed to hang on to it despite the reversal in paper assets. The US Dollar did not fare as well, giving up its early and overnight gains to finish back below the 90 handle.
“We see that gold broke above its downtrend line. But now we see a massive base building in gold. Massive. It’s a five-year base in gold. If we break above this resistance line, one can expect gold to go up by, like a thousand dollars.”
Jeff Gundlach
Late in the afternoon the news came out that the FBI had raided the offices of Michael Cohen, who is President Trump’s personal lawyer. Yowza! That did not help the mood in the snake pits of Wall Street.
Brace for twitterstorm?
Facebook’s Zuckerberg will be answering questions before the US Congress tomorrow, in an extravaganza of self-righteous recriminations from the very people who have been letting him do as he pleased while taking his money in campaign contributions for many a year.
It may even be as harsh as the tongue-lashing that the esteemed Congress gave to the financial people after the crisis, before doing nothing much about it except bailing them out and guaranteeing their fortunes with public monies.
These markets are like a vehicle being driven by hard drinking, pipe-hitting, out of control chuckleheads who are not going to stop pushing things to the limit and tempting fate until they wrap themselves around a telephone pole.
If we were virtuously governed they would have been stopped long before now, as they have a certain number of unfortunate innocents in the backseat with them, and other pedestrians and passers-by who are likely to become collateral damage to their callow pursuit of selfishness and greed.
Try not to get in their way.
