Stocks Turn Ugly In Short Session: Time Out On Wall Street

The Dow took a nearly 300-point round trip from top to bottom on the second trading day of the third quarter, rising by more than 137 points before collapsing in the final hour to close 1/2 percent lower. The NASDAQ was beaten down further, off 65 points on the day (-0.86%).

Markets can become discouraged by many factors, but for this current one, it seems to be merely a matter of during out after nine-plus years of unprecedented fantasy. Speculators, those eager early-day traders who took it on the chin today as they have on many other recent sessions, have to be concerned that investors might catch on to the fact that the global economy is not all roses and unicorns, but rather a patchwork of central bank machinations that have distorted what used to be free markets into stealthy, clandestine, controlled entities.

If that becomes the case, the second leg of the bear market will commence in short order and likely not cease until well after the Dow falls 20% from the January 26 high (26,616.71), a process that could last anywhere from three to six months. This is shaping up to be a long drawdown of asset values, considering that the central bankers will not readily abandon their chosen "low unemployment and moderate inflation" narrative, of which practically everyone who matters is in disbelief already. The proof is in stock market and bond returns, both of which suggest contraction instead of a healthy growth environment.

July 4, Independence Day in the United States, will be an anchor on foreign markets because there will be no trading on the day. China has already intervened in their equity markets to stem the outflows. Italy, and thus, all of the EU, is staring directly at a major solvency crisis which could explode and uncouple the southern nation from the rest of Europe. Already, the new Italian government has ECB officials on edge.

Argentina is already a basket case, as is Venezuela, with Brazil close to chaos as well.

Maybe it's time the politicians in Washington stop focusing on the "evil" Russians (who are doing quite well, despite sanctions and expulsions of their diplomats by the US), and begin taking account of the rest of the world, which seems to be not right at all.

Dow Jones Industrial Average July Scorecard:

Date	Close	Gain/Loss	Cum. G/L
7/2/18	24,307.18	+35.77	+35.77
7/3/18	24,174.82	-132.36	-96.59

At the Close, Tuesday, July 3, 2018:
Dow Jones Industrial Average: 24,174.82, -132.36 (-0.54%)
NASDAQ: 7,502.67, -65.01 (-0.86%)
S&P 500: 2,713.22, -13.49 (-0.49%)
NYSE Composite: 12,494.70, +9.12 (+0.07%)

Coincidence Or Conspiracy? The Art Cashin - Fearless Rick Echo Chamber

Not one to expectantly toot one's own horn, Money Daily continues to display some market sense, the latest iteration being the confluence of the weekly market recap post from Sunday, February 26, Dow At Record Highs 11 Staight Sessions; Eye On PPT, Central Bank Intervention dovetailing with legendary floor trader Art Cashin's commentary at King World News the same day.

In the nearly 15-minute audio, Cashin, Director of Floor Operations for UBS, touched (near the end of the broadcast) on the very same subject matter as Money Daily, namely, central bank intervention in markets.

Like Fearless Editor and Publisher, Rick Gagliano, Cashin - undeniably a more expert analyst than our own - sees intervention as unsettling to markets, comparing the intrusion to a rigged poker game, and sees danger in such action. As is the usual case, Mr. Cashin plows some new ground as well, coining the phrase "intellectual civil war" in describing the conditions in Northern vs. Southern Italy and touching upon other established, mostly European nations.

In defense of his moderate style, Cashin opines that his success has been largely based upon, quoting him,

...because the first thing I do when I enter a room is look for the exit signs.

Good stuff, indeed, and well worth a listen.

Keeping in mind central bank intervention, i.e., buying at all-time highs, the Dow made a new record close for the 12th straight session, that, in itself, should be cause for alarm... the one that never goes off at market tops (Old Wall Street saying: "they never ring the bell at the top").

The Dow has never closed higher for 13 straight sessions, the most recent run tying the mark set in January 1987, which, as market observers know well, was the precursor of one of the most devastating crashes in market history.

At the Close, 2.27.17:
Dow: 20,837.44, +15.68 (0.08%)
NASDAQ: 5,861.90, +16.59 (0.28%)
S&P 500: 2,369.75, +2.41 (0.10%)
NYSE Composite: 11,558.35, +17.06 (0.15%)