Gold spikes $30 as extreme fear grips global markets but here is the really big danger.

“Extreme Fear”
October 11 (King World News) – Here is a portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness:  Reflecting the rough market this week, sentiment has changed rather sharply as evidenced by both the AAII individual investor sentiment and the CNN Fear/Greed index. The CNN Fear/Greed index fell to 8 as of yesterday’s close. This index ranges from 0-100 so this would be considered ‘Extreme Fear.’ (see illustration below).

The market is now very oversold so we’re likely due for a bounce with the real test of the market being the degree of that bounce…

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Big Danger Signal
With corporate credit being the main area of excess in this cycle in the US in terms of corporate balance sheets, interest coverage, LBO valuations, credit spreads and the massive size now of the CLO market, keep an eye on this chart of high yield, HYG (of course reflects ex dividends). (see chart below).

Brace For Impact – High Yield Market Sends Major Warning Signal

Gold & Silver On The Move
I’ll express my positive stance on gold and silver for the millionth time in light of what’s going on. As a backdrop if you didn’t see, the net speculative short position seen in Friday’s CFTC data for the week ended last Tuesday, rose to a fresh 17 year high (see chart below).

We Haven’t Seen This Since 2001 – Specs Short Gold, In Danger Of Being Squeezed

I’ll also reiterate my belief that the British pound is likely moving much higher when their Brexit deal is done which it seems is getting close.

British Pound Ready For Massive Rally On Brexit Deal?

More Fuel For The Short Squeeze In Gold
King World News note:  If Boockvar is correct and the British pound sees a massive rally on a finalized Brexit deal, this would send the US dollar lower and add fuel to the fire of the already developing short squeeze in the gold market.

***KWN has released the audio interview with Rick Rule discussing the gold, silver, uranium, crude oil and interest rate markets and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.

ALSO JUST RELEASED: Art Cashin – Dow Plunged More Than 800 Yesterday But Here Is A Much Bigger Problem CLICK HERE TO READ.

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