It’s been a busy weekend and to summarize the mood of markets and world reality today sell every damned thing that is not nailed down. The markets globally are just now recognizing the nightmare of the Chinese economy crashing and burning with the Shanghai stock exchange leading the way down with 5% decline:
For some perspective, if the US markets were to have a 5% drop today that would be about 1700 Dow points and Cramer would once again say that’s the climax in the selling.
Because the truth about the Chinese economy is finally being realized and the impact it will have on European and US growth, every asset class but US Treasuries are being sold off violoently. The “experts” will warn everyone that the February/March lows of this year are key, but more importantly the lows from May of 2021 are far more precarious.
A break of the 4060 level on the S&P 500 will result in an either slow motion lead up to a crash or an immediate 3-5% drop. I still maintain we are only in Wave 2 down which should lead to a test of the 4060 levels then violation before a “summertime rally” provides the final false hope that the Fed knows what it is doing.
Just like everyone thought in the summer of 2008.
Enjoy the fireworks today, the dead AAPL cat bounce this week, then the major rollover to new lows for 2022 which I foresee next week.
While I’m fishing.
In the Caribbean.
And no, I will not give a crap.