With investors around the globe worried about the recent plunge in stocks, extreme fear is beginning to take hold. There is also a bonus interview with one of the greats in the business discussing the recent action in the gold and silver markets.
Regarding The Recent Selloff
October 17 (King World News) – Here is a portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness: After the recent selloff, bullish sentiment moderated further according to Investors Intelligence. Bulls fell to 51.9 from 56.3 last week and 61.8 in the week prior. The buy on the dip mentality (certainly worked for those who bought Monday) just won’t die as none of the drop in the bulls in the past few weeks went to the Bear side. They all shifted to Correction instead. Two weeks ago when Correction went to a 6 1/2 year low it was the perfect contrarian set up for a selloff. Today it’s at a 3 1/2 month high at 29.8 just in time for yesterday’s oversold bounce. Those that consider themselves as a Bear fell to 18.3 from 18.5 last week.
The CNN Fear/Greed index got down to 5 last week and closed yesterday at a still very low 13, remaining in the ‘Extreme Fear’ range and up 2 pts from Monday…
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Boockvar continues: This last pullback in stocks took the S&P 500 back to its 200 day moving average, give or take, for the 4th time frame this year. The real test, passed in the previous 3, though is the state of the bounce after. The standoff between the monetary tightening on one hand and strong US earnings growth on the other is only intensifying with the former having its impact now as the market has churned for 8 months.
Looking at the 200 day moving average for a broader swath of stocks, only 33% of NYSE stocks closed above its 200 day moving average on Monday. I don’t yet have the updated number after yesterday’s rally.
Percentage Of NYSE Stocks Closing Above 200 Day Moving Average Plummets!
The impact of higher rates finally showed up in the weekly mortgage application data. With the 30 yr mortgage rate up another 5 bps to 5.10%, the highest since February 2011. Purchase applications fell 5.9% w/o/w and the index is at the lowest level since February 2017. Refi’s dropped by 9% w/o/w and are down 34% y/o/y and at a fresh 18 year low. We know the housing market is slowing as home price inflation (both price and funding) has finally bitten. Understand that we have almost an entire generation that does not know what a mortgage with a 5 handle is.
30 Year Mortgage Rates Have Spiked Since 2016, Now At 5.1%
Also of importance…
BONUS INTERVIEW: The Gold & Silver Markets
KWN has just released a remarkable audio interview with one of the greats in the business, Adrian Day, Founder of Adrian Day Asset Management, discussing the gold and silver markets and much more and you can listen to it immediately by CLICKING HERE OR ON THE IMAGE BELOW.
ALSO JUST RELEASED: Celente – The Recent Stock Market Carnage Is Only The Beginning CLICK HERE TO READ.
***KWN has now released the powerful audio interview with John Mauldin and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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