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            *                       FIEND'S SUPERBEAR MARKET REPORT                     *

            *                               October 16, 2014                            *

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            *                       e-mail: fiendbear@fiendbear.com                     *

            *                    web address: http://www.fiendbear.com                  *

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                                            Fiend Commentary                             

                                            ================

                                                                 

            A wild day that saw the Dow down almost 500 points early on. The Dow

            recovered from a possible disaster but was on the defensive for the entire

            day. Overall stocks mostly recovered but the Dow was still down 173 points.

                 

            In Europe stocks are being hit even harder and US bonds had another huge

            day. The mixed signals continue but now folks are saying the Fed's next

            move might be QE4 which is totally insane and should be the most negative

            thing for the markets. I always believed the Fed would not be able to close

            the Pandora's Box of super easy rates. Wall Street is completely addicted

            and even with this for the past five years the economy is still having

            doubts.

                 

            The Dow moved further below its 200 DMA to its lowest since November 2012

            when the Dow was trading below 13,000. Momentum has slipped negative for

            its long term trend for the first time since December 2011. The VXO has shot

            up above 23 but recall that in previous market episodes it has spiked above

            40. Volatility just seems to be catching up to its long term average.

                 

            Futures are down hard again overnight for Thursday's opening and things are

            close to unravelling completely. This is where the Plunge Protection Team

            is expect to go to work but I have always been skeptical of its actual

            existence. What Wall Street could be discounting going forward is another

            recession that the Fed doesn't have the tools to deal with. This would be

            the first that I know of that occurred before they even began to raise

            rates from ridiculously low levels. Protection Team is still active they will

likely need to go to work. Bonds are shooting higher as if a recession is already

baked in but at the same time there is still talk of the Fed raising rates next

year. Something doesn't jive and we will probably know more by the end of this

week.                                                            


 

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