There are sure to be folks who went to bed last night, loaded with put options, that had stars in their eyes about what color of Lamborghini to buy today, only to have WTF coming out of their mouths this morning. The ES has plunged, then bounced, in about a 70 point range. Simply draw-dropping.
Of more interest to me, frankly, is what’s going on with gold. I really like what I see here. We’ve had two “shock events” in just a couple of days with gold, each time ripping the metal to fresh recent highs.
Looking at the longer-term picture, the big question is how weak gold might get. Will support hold above the entire tinted area? I hope so. If not, then what? Well, I think the key, if we do penetrate that green zone, is to at least respect support at that lower horizontal I’ve drawn. If this fails, then this entire “Gold Is Waking Up To Central Banker Insanity” theory goes out the window. For now, though, all is well.
In order to equities to honest-to-goodness sustain a drop, I think bonds need to turn around. They’ve been trying, God bless ’em, but so far it’s just been a series of lower highs. At least the strength of the selling has been abating.
Lastly, as I woke up way-too-early this morning (about 3:30 a.m.) I was amused to see this new great moment in web advertising. Take note of the ad and the story just beneath it.