This is not a dip, it's a disaster.
Dow opened down & quickly fell 1,089.42 points. That's not a typo, 1,089.42 Only barely did it manage to close above the October 2014 low (15,855), and that only after climbing 588.4 points off the low.
Broken beyond repair.
Note that crash cycles last six to eight weeks. That popping sound y'all hear are just the corks coming out of the jugs -- party is just starting.
Dow fell 588.4 or 3.57% to 15,871.35. S&P500 lost 77.68 or 3.9$% to 1,893.21. Investors had all weekend to stew over Friday's losses & you can bet the sell orders were stacked higher than they hung Haman this morning. Market opened & there just wasn't room for everybody to get through the door at the same time.
Dow in gold fell 3.1% or G$9.10 gold dollars to G$284.23 (13.75 oz), now in shooting distance of the uptrend from the 2011 low. Go look, y'all will seldom see a chart like this, http://schrts.co/C46U5s
Dow in silver did nothing because of silver's loss today, but is still broken & destined to fall much further. Ended at S$1,390.27 (1,075.29 troy ounces).
More shocking even that stocks' performance today was the US dollar index Early in the day it simply tanked, falling 248 basis points (2.61%) to a low at 92.62. Ended down only 145 basis points (1.53%) at 93.56. Chart is here, http://schrts.co/OkJ5UT
Dollar index SMASHED its 200 day moving average and only barely closed above the June low (93.30), ending at 93.56.
If this happens in the green tree, what will happen in the dry? This took place IN SPITE OF millions flowing into US Treasuries, witnessed by the 2.78% fall in yields.
Euro rose 1.89% to $1.1604. Who in his right mind would look upon the euro as a "safe haven"? Nuts. Gapped up and over the 200 DMA. Headed higher as surely as the US dollar is headed lower. http://schrts.co/yysHLa
Most shocking is the yen, up 3.05%. Gapped clean over its 200 DMA and closed at 84.42. Pushed it up to way overbought on RSI.
This dollar fall presents the today's biggest question. Normally a stock market crash does not take down a national currency. If anything, just the opposite as investors rush to cash for safety. This is a right bad sign.
Gold lost 6.20 (0.53%) to 1476.2while silver fell 53.9 cents (3.5%) to 1476.2.
That sent the ratio up to 78.133, following the pattern of the ratio in 2008. Most obvious explanation is that Gold is catching the flight-to-safety money but silver is not. I'm still trying to fit this together with the dollar's plunge. Look at the chart here, http://schrts.co/kh9gOy
Plainly I misjudged gold's strength on Friday, and its ability to punch through the resistance from $1,155 to $1,190. Will gold be sucked down with stocks? That's not what the Dow in gold says, but now we have to wonder about silver.
Shades of 2008! Premium on US 90% silver climbed another 45 cents an ounce today, about offsetting the drop in price. During 2008 the premium on all physical silver rose well above 50%. Paper price dropped, but physical refused.
More choices: maybe gold is merely correcting the vertical rally that brought it to the top channel line. About all that's sure is more turmoil. No matter whether silver & gold are pulled down in the maelstrom of stocks crashing, the aftermath will see them soar. Already you are better off to have swapped stocks for either gold OR silver than to have held on to stocks.
Silver's drop today shouldn't surprise us. It ain't gold, after all, but gold's little brother. Still, both today and Friday behaved much the same, with a sudden drop and just as sudden recovery. Toward day's end, however, silver looked tired and began inching down.
White metals were knocked down today. Platinum lost $35.60 (3.45) & palladium crumpled $29.40 (4.9%).
It's a panic. If you've ever lived through a house or forest fire you know what that means, the fear that grips and the confusion what to do next.
All in all, no matter how this panic rolls out, I'd rather be holding silver or gold in my hands than dollars. Call me paranoid. 'Twon't hurt my feelings a-tall. I ain't no more'n a nat'ral born durn fool from Tennessee anyway -- but I didn't own no stocks, remember.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger