What in the world to I mean by an Elvis market?
Yup, trapped in a range bound nightmare.
Despite yesterday’s decline and the accompanying headlines like this one from ABC:
Stock market today: Wall Street weakens as energy stocks, Home Depot weigh
was truly a no no burger. As in no volume, no commitment of direction, no breadth, no nothing of meaning once again.In fact the 3800-4200 range remains intact on the S&P 500 to this day.
There does not appear to be any impetus to break out of this range in either direction as distribution continues in the underlying market while only 7-10 equities are holding up the overall indexes. As I warned before I left last week, the equal weighted indexes are showing nothing but rot under the surface so eventually something has to give.
There is a problem developing however that only the geeks like myself are paying attention to and it is starting to expand:
The problem is that it is not just copper. The underlying group of base metals is breaking down in price at this time also. Gold and silver prices are starting to decline also, as the US Dollar Index hints at a breakout above the 103 level.
Prepare for impact. A break below 3.50 on copper and $1900 on gold could indicate the first deflationary wave will hit within the next 90 days as well as an acceleration of contracting overall consumer demand. Dr. Copper never lies so there is something else fundamentally wrong with the US and global economy which indicates a contraction is incoming.
Is the Fed’s desired economic contraction finally beginning? Time will tell so stay tuned, it’s about to get interesting.