Stocks Creamed At Opening, Rally For Minor Losses

As mentioned in the most recent post, stocks tested a variety of support levels on Tuesday and actually crashed right through them early in the session.

But, about 10:30 am ET, a rally began, first in fits and starts, but by noon, it was well underway, lifting stocks well off their lows and continuing until... until... well, no, the major indices didn't turn positive, not even for a fleeting instant. By 3:00 pm all of the "greater fools" had been had, the dip buyers had bought all the dips they could and stocks drifted slightly lower into the close.

What started with the Dow down nearly 550 points, the NASDAQ off by more than 200, the S&P losing more than 60 points and the NYSE Composite down 264, ended with merely pedestrian losses and investors wiping the sweat from their furrowed brows. Once again, as has happened so many times during the Fed-led bull market of the 2010s, stocks averted catastrophe and sailed through the day thanks to so-called bargain hunters, that rare breed of speculators who believe buying a stock that's three to five percent off its highs is some kind of grand deal.

This is more than likely the coordinated work of central banks, who are not ever audited, who can created limitless amounts of funny money with the push of a button, and who have done so regularly in order to keep alive the dreams of prosperity and financial security for millions, by inventing - and then investing - trillions.

Behind the scene presented to the unsuspecting, unprofessional investing class - those people with retirements and life savings locked into 401k and other accounts - there was real damage. One index that did not recover very well at all was the Dow Jones Transportation Index, which slipped 199 points, to 10,237.02, a loss of 1.90%, sending it well below the key level of 10,397.23, its most recent low, from October 11, while also descending into correction territory for a second time this month, below 10,413.

With the transports falling like a bowling ball off a cliff, the importance of transportation to the rest of the economy has to be put into question. If nothing's moving, or, at least moving with less alacrity and determination, how strong is the whole economy? With their relevance to the Industrials via Dow Theory and in real life practice, the transports are the answer in search of a question, the question being how long can the slip-slide-recover charade continue before the bottom falls completely out?

The other fly in the financial ointment is, and has been, oil. WTI crude lost ground again today, sliding more than four percent into the low-$66 range, well off the $76/barrel high recently achieved. Not to offer a punnish perception, but oil greases the skids of industry and transportation. Lower pricing for the world's most vital commodity can mean one of three things: 1) lack of demand, 2) oversupply, 3) global recession. Of course, a combination of all three might be the correct analysis, though the implications of such a paroxysm might trigger a more virile reaction amongst the monied class.

Considering the ramifications of the major indices falling straight through support levels and then rebounding to more respectable levels, plus the demise of oil and the transports, one can easily conclude that the October volatility that has been apparent since the start of the month is nowhere near abatement. Even the mediocre losses today add to somebody's misery, though the pain felt is being doled out in small units, much like Chinese water torture, rather than having investors suffer the quick blade of the guillotine in a sudden crash (that may be saved for closer to the mid-term elections).

Stating the very, very obvious, this is far from over.

Dow Jones Industrial Average October Scorecard:

Date	Close	Gain/Loss	Cum. G/L
10/1/18	26,651.21	+192.90	+192.90
10/2/18	26,773.94	+122.73	+315.63
10/3/18	26,828.39	+54.45	+370.08
10/4/18	26,627.48	-200.91	+169.17
10/5/18	26,447.05	-180.43	-11.26
10/8/18	26,486.78	+39.73	+28.47
10/9/18	26,430.57	-56.21	-27.74
10/10/18	25,598.74	-831.83	-859.57
10/11/18	25,052.83	-545.91	-1,405.48
10/12/18	25,339.99	+287.16	-1,118.32
10/15/18	25,250.55	-89.44	-1,207.76
10/16/18	25,798.42	+547.87	-659.89
10/17/18	25,706.68	-91.74	-751.63
10/18/18	25,379.45	-327.23	-1,078.86
10/19/18	25,444.34	+64.89	-1,013.97
10/22/18	25,317.41	-126.93	-1,140.90
10/23/18	25,191.43	-125.98	-1,265.88

At the Close, Tuesday, October 23, 2018:
Dow Jones Industrial Average: 25,191.43, -125.98 (-0.50%)
NASDAQ: 7,437.54, -31.09 (-0.42%)
S&P 500: 2,740.69, -15.19 (-0.55%)
NYSE Composite: 12,287.44, -87.33 (-0.71%)