Stocks Take Deep Dive on Trump Recession Possibility; NASDAQ Goes Deeper Into Correction: Dow Industrials Confirm Primary Trend Reversal

Suffice it to say that Monday's market action was not a good way to start the week. However, judging by market activity the past few weeks, it was readily predictable and maybe even inevitable.

The bad news is that it appears there's more to come. The good news is that there's likely to be a bounce-back rally of some magnitude.

On Sunday's WEEKEND WRAP, the question was whether or not the Dow Industrials would confirm the drop on the Dow Transports essential to the Dow Theory's Primary Trend Reversal. The answer was a loud and clear, resounding yes.

Not only did the Dow close below the most recent low (41,938.45, January 10), but the intra-day low of 41,612.92, was down with earlier closing lows from October 31 (41,763.46) and November 4, 2024 (41,749.60), essentially a double bottom. Late-day tape-painting once again saved the Dow from an ignominious finish, tacking on just less than 300 points in the final 48 minutes.

The NASDAQ, quite naturally, as it remains the most overpriced of the majors, took the brunt of the deal, losing four percent on the day. While the 727.90-point loss on the NASDAQ was the third-highest ever, in percentage terms, it didn't even make the top 25.

The S&P's loss of 155.64 comes in as the ninth-highest ever, but the 2.70 percentage loss was not even close to the top 40. Incidentally, the top 20 largest-point losses on both the NASDAQ and S&P are all from 2020 forward, attesting to overvaluation in extremis.

In any case, Monday was not "The Big One."

Year-to-date, the NASDAQ is down 9.54% and already in correction (-10% or more). The S&P is off 4.54% and the Dow a mere 1.49%.

Overall, the economic outlook is rather gloomy, the result of dealing with reality as opposed to the fantasy of the past 16 years (since the sub-prime bottom in March, 2009). Money Daily has been carping about valuation for the longest time. Others are beginning to chime in, especially analysts from the major brokerages, who are busy revising their forecasts for 2025. Sorry, fellas, too little, too late. People are beginning to lose faith in the almighty power of Wall Street.

Elsewhere, bitcoin dipped below $77,000, a four-month low and a distinctive repudiation of all the ecstasy over bitcoin ETFs, and the latest, the Crypto Sovereign Wealth Fund established last Thursday by a Trump Executive Order and kicked off with a ceremony at the White House Friday. It was evident to all but the cultist "hodlers" that the U.S. Treasury has no plans to be buying any bitcoin or other crypto any time soon.

As usual, gold and silver got kicked lower, but both have already rallied back to levels seen last week. Gold: $2,912; silver: $32.67.

WTI Crude oil bottomed at $65.52, but is rallying Tuesday morning by about a buck.

Futures were higher earlier, but have flattened out and turned negative, which probably means the bounce-back rally may not happen today, or at worst, will begin to take shape sometime after 10:00 or 11:00 am ET.

Bears are at the door and they appear quite hungry.

At the Close, Monday, March 10, 2025:
Dow: 41,911.71, -890.01 (-2.08%)
NASDAQ: 17,468.32, -727.90 (-4.00%)
S&P 500: 5,614.56, -155.64 (-2.70%)
NYSE Composite: 19,202.38, -370.69 (-1.89%)