The Peter Schiff Show Podcast

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Bearish Signal

So much for yesterday's dead cat bounce.  All of the U.S. stock market averages came plunging down today, in fact they all closed below yesterday's lows. So even though we had those big rallies off the lows, today, we lost the entire gain and closed lower than yesterday's low point.  That is is the most bearish signal you can get.

Yesterday's Short Covering

Remember on yesterday's podcast, I was not impressed with yesterday's rally. I thought it was a typical "reversal Tuesday" rally that should be ignored. To me, it looked like a lot of short covering, particularly if you look at the type of stocks that were being bought.  They seemed to me that they were the stocks that had a lot of shorts, so the shorts saw a big gap down and decided to take an opportunity to cover. But, when you have a lot of shorts who cover, that's actually bearish, because during the next decline, they are no longer there to buy. That's why this next decline could be particularly vicious.  I don't think the decline is finished; as I said, I think it is just getting started, unless the Federal Reserve is going to come in and change the nature of the game,

Biggest Single NASDAQ Decline since 2008 Financial Crisis

The Dow was down over 600 points today - 608 points. That is a percentage decline of  2.41%.  Of course there were a lot of stocks that did a lot worse.  Earnings today from AT&T - that stock was down just over 8%.  I think there were also some worries concerning the slow growth of subscribers at DirecTV, a recent AT&T acquisition.  Also, UPS, came out with disappointing earnings today. The stock was down 5.5% today.  Boeing might be the only stock that was positive today, up 1.3% - a beat.

The fact that this was the biggest single day decline in Nasdaq since the 2008 financial crisis means that today's drop is larger than any point drop that we had during the 2008 financial crisis. You have to go all the way back to the bursting of the dot com bubble.  Something big is happening when you see this kind of drop. The market technically couldn't be weaker.

 

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Bearish Signal

So much for yesterday's dead cat bounce.  All of the U.S. stock market averages came plunging down today, in fact they all closed below yesterday's lows. So even though we had those big rallies off the lows, today, we lost the entire gain and closed lower than yesterday's low point.  That is is the most bearish signal you can get.

Yesterday's Short Covering

Remember on yesterday's podcast, I was not impressed with yesterday's rally. I thought it was a typical "reversal Tuesday" rally that should be ignored. To me, it looked like a lot of short covering, particularly if you look at the type of stocks that were being bought.  They seemed to me that they were the stocks that had a lot of shorts, so the shorts saw a big gap down and decided to take an opportunity to cover. But, when you have a lot of shorts who cover, that's actually bearish, because during the next decline, they are no longer there to buy. That's why this next decline could be particularly vicious.  I don't think the decline is finished; as I said, I think it is just getting started, unless the Federal Reserve is going to come in and change the nature of the game,

Biggest Single NASDAQ Decline since 2008 Financial Crisis

The Dow was down over 600 points today - 608 points. That is a percentage decline of  2.41%.  Of course there were a lot of stocks that did a lot worse.  Earnings today from AT&T - that stock was down just over 8%.  I think there were also some worries concerning the slow growth of subscribers at DirecTV, a recent AT&T acquisition.  Also, UPS, came out with disappointing earnings today. The stock was down 5.5% today.  Boeing might be the only stock that was positive today, up 1.3% - a beat.

The fact that this was the biggest single day decline in Nasdaq since the 2008 financial crisis means that today's drop is larger than any point drop that we had during the 2008 financial crisis. You have to go all the way back to the bursting of the dot com bubble.  Something big is happening when you see this kind of drop. The market technically couldn't be weaker.

 

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A Big Constituency of Highly Indebted People

The fact that you have created this big constituency of highly indebted young people - they're like indentured servants. The government now loans them the money and now they are in debt to the government for the rest of their lives. But now the government can say, "Vote for me and we'll let you off the hook!"

You Don't Have to Repay Your Loan as Long as You Keep Re-Electing Me

Or they might have some other program where they do not completely wipe out the debt; maybe if you work for government for a certain number of years - maybe they will try to craft the program in such a way to make sure that these young people constantly vote for whichever politician promises to keep the wolves at bay: "You don't have to repay your loan as long as you keep re-electing me." It is another group of bought voters. Just like Social Security. Why does Trump want to pander to Social Security?  Why does he want to say, "We're never going to cut Social Security."? He wants all the people who are on Social Security to vote for him, or to vote Republican.

At Least the Democrats Say the Rich Are Going to Pay for It

No one wants to take anything from anybody. Nobody wants to give anybody the bad news.  Trump wants to be all things to all people. Everybody gets everything; no one has to sacrifice.  No one has to pay. Everybody eats free lunch - no one has to cook it. At least the Democrats say the rich are going to pay for it.  Trump says nobody's going to pay for it. It's all going to magically appear because of this booming economy which isn't even booming. At least the Democrats' lie seems a little more believable. They are not saying the money's coming from nothing, it's coming from these rich people who are lucky enough to have all this money and we can just take this money from them - they're not going to miss it because they don't need it anyway, and somehow it's enough for everybody to have everything that they want.

 

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A Big Constituency of Highly Indebted People

The fact that you have created this big constituency of highly indebted young people - they're like indentured servants. The government now loans them the money and now they are in debt to the government for the rest of their lives. But now the government can say, "Vote for me and we'll let you off the hook!"

You Don't Have to Repay Your Loan as Long as You Keep Re-Electing Me

Or they might have some other program where they do not completely wipe out the debt; maybe if you work for government for a certain number of years - maybe they will try to craft the program in such a way to make sure that these young people constantly vote for whichever politician promises to keep the wolves at bay: "You don't have to repay your loan as long as you keep re-electing me." It is another group of bought voters. Just like Social Security. Why does Trump want to pander to Social Security?  Why does he want to say, "We're never going to cut Social Security."? He wants all the people who are on Social Security to vote for him, or to vote Republican.

At Least the Democrats Say the Rich Are Going to Pay for It

No one wants to take anything from anybody. Nobody wants to give anybody the bad news.  Trump wants to be all things to all people. Everybody gets everything; no one has to sacrifice.  No one has to pay. Everybody eats free lunch - no one has to cook it. At least the Democrats say the rich are going to pay for it.  Trump says nobody's going to pay for it. It's all going to magically appear because of this booming economy which isn't even booming. At least the Democrats' lie seems a little more believable. They are not saying the money's coming from nothing, it's coming from these rich people who are lucky enough to have all this money and we can just take this money from them - they're not going to miss it because they don't need it anyway, and somehow it's enough for everybody to have everything that they want.

 

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Overwhelming Evidence of a Weakening Economy

The Dow Jones was the only one of the major indexes to close the day higher.  The S&P was down slightly, we had larger declines in the Nasdaq and the Russell 2000.  More importantly than the movements that we've just seen on the day, or even the week, look at what's happened thus far during the month of October, which I had been warning on my podcast. It looked like there could be a weak October, given where we were in the market, given how ridiculous the sentiment was in the face of overwhelming evidence that the economy was weakening

Russell 2000 Down 9.2%

If you look at the numbers, the Dow Jones is down 3.8% so far on the month. That's the best performing of the averages. The S&P, down about 4.7% on the month, Nasdaq Composite down 7.4%; the transport down 8.3% and the Russell 2000 - 9.2% decline. Remember, the Russell 2000 is where everybody wanted to buy. Earlier last month the talk was that you needed to be in the Russell 2000 because the rest of the world was in trouble, you needed a safe haven from all the turmoil around the world, that the U.S was going to win the trade war, and of course, the companies that had the least vulnerabilities to the trade war were the domestic companies that weren't multinational and those are the companies that you would find in the Russell 2000. Small-company U.S. stocks - so people were piling in. Those are the stocks that have done the worst. Down 9.2% on the month.

Gold, Gold Stocks Up; Bond Yields Continue to Rise

While stocks were going down, gold was going up. Gold is up about 3% so far during the month of October.  Gold stocks doing even better - GDX and GDXJ each up about 8% so far on the month.

Bond yields continue to rise; they were higher today; higher on the week; higher on the month and as bond yields are rising, the dollar is also rising, but ever so slightly. We're not seeing that much of a gain in the dollar. But ultimately, the dollar is going to turn around when people finally what should have been obvious all along: that the U.S. economy is not nearly as strong as is generally believed. It is certainly not as strong as the Federal Reserve is claiming.

Markets Fall as Fed Shrinks Balance Sheet

The FOMC minutes were out earlier  this week and once again, the Fed is displaying extreme confidence in the U.S. economy as it continues to maintain its stance that it will continue to raise interest rates; that it is going to continue with its plan to shrink its balance sheet.  Of course that is the real reason that the markets continue to fall.  The Fed continues to threaten the markets with higher interest rates.

When You're in a Bear Market, You Don't Need an Excuse for the Market to Go Down

Yesterday, we had a pretty big drop in the markets intra-day; the Dow surrendered some gains and a lot of the people in the media were trying to figure out what was to blame.  They were pointing to speeches that Larry Kudlow made where he was talking tough against China or Trump talking tough or even European Union getting tough with Italy - I forget all the various excuses.

But, you know what? the market would have probably fallen even if none of those things had happened. When y0u're in a bear market, and I think there's a very good chance we're in a bear market, you don't need an excuse for the market to go down. The market just goes down.

 

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Overwhelming Evidence of a Weakening Economy

The Dow Jones was the only one of the major indexes to close the day higher.  The S&P was down slightly, we had larger declines in the Nasdaq and the Russell 2000.  More importantly than the movements that we've just seen on the day, or even the week, look at what's happened thus far during the month of October, which I had been warning on my podcast. It looked like there could be a weak October, given where we were in the market, given how ridiculous the sentiment was in the face of overwhelming evidence that the economy was weakening

Russell 2000 Down 9.2%

If you look at the numbers, the Dow Jones is down 3.8% so far on the month. That's the best performing of the averages. The S&P, down about 4.7% on the month, Nasdaq Composite down 7.4%; the transport down 8.3% and the Russell 2000 - 9.2% decline. Remember, the Russell 2000 is where everybody wanted to buy. Earlier last month the talk was that you needed to be in the Russell 2000 because the rest of the world was in trouble, you needed a safe haven from all the turmoil around the world, that the U.S was going to win the trade war, and of course, the companies that had the least vulnerabilities to the trade war were the domestic companies that weren't multinational and those are the companies that you would find in the Russell 2000. Small-company U.S. stocks - so people were piling in. Those are the stocks that have done the worst. Down 9.2% on the month.

Gold, Gold Stocks Up; Bond Yields Continue to Rise

While stocks were going down, gold was going up. Gold is up about 3% so far during the month of October.  Gold stocks doing even better - GDX and GDXJ each up about 8% so far on the month.

Bond yields continue to rise; they were higher today; higher on the week; higher on the month and as bond yields are rising, the dollar is also rising, but ever so slightly. We're not seeing that much of a gain in the dollar. But ultimately, the dollar is going to turn around when people finally what should have been obvious all along: that the U.S. economy is not nearly as strong as is generally believed. It is certainly not as strong as the Federal Reserve is claiming.

Markets Fall as Fed Shrinks Balance Sheet

The FOMC minutes were out earlier  this week and once again, the Fed is displaying extreme confidence in the U.S. economy as it continues to maintain its stance that it will continue to raise interest rates; that it is going to continue with its plan to shrink its balance sheet.  Of course that is the real reason that the markets continue to fall.  The Fed continues to threaten the markets with higher interest rates.

When You're in a Bear Market, You Don't Need an Excuse for the Market to Go Down

Yesterday, we had a pretty big drop in the markets intra-day; the Dow surrendered some gains and a lot of the people in the media were trying to figure out what was to blame.  They were pointing to speeches that Larry Kudlow made where he was talking tough against China or Trump talking tough or even European Union getting tough with Italy - I forget all the various excuses.

But, you know what? the market would have probably fallen even if none of those things had happened. When y0u're in a bear market, and I think there's a very good chance we're in a bear market, you don't need an excuse for the market to go down. The market just goes down.

 

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Thanks to Listeners for 400 Episodes of The Peter Schiff Show Podcast

For those of you who say that Peter Schiff does Podcasts when the Dow is down, Dow Jones was up 547 points today.  This is my 400th episode of the Peter Schiff Show Podcast. I want to take a moment to thank my audience - everybody who has been listening to the podcast.  Especially to the people who have listened to all 400 episodes.  By the way,  if you missed a few, they're all archived.

Check out all the Archived Episodes of the Shows

Some people have been listening for a lot longer.  I was doing a daily talk show for 3 years or so. I started it after my failed Senate campaign to continue to get my ideas out there.  But I eventually did not have enough hours in the day to commit to be at a mic for 2 hours each day doing a live show, even though I enjoyed it - we had a lot of guests and I took a lot of calls. Before I ran for Senate, I did a once a week call-in show, Wall Street Unspun. Some people who are listening to the podcast go all the way back to the Wall Street Unspun days. A Special thanks to the people who have listened all of these years.

Please Take the Time to Rate and Review my Podcast

Remember, if you have been listening to my podcasts, certainly if you've listened to all of them, do me a favor and rate the podcast on iTunes or whatever platform you use to access my podcast.  Rate the podcast, make comments about the podcast, put 5 stars down there.

Market Up, But We May Still be in Bear Territory

There is so much overwhelming evidence that the bull market is over, and that's what I want to focus on. The housing stocks had a rally today but the auto stocks are still very weak. The economic data that I've been seeing has been weak but nonetheless, as I said earlier, the Dow was up 547 points, that was 2.17%.  But the NASDAQ Composite was up 214 points - 2.89% on the day. The Russell 2000, which had been getting beaten up was up 43 points today - 2.82%.

Gold Steady, Dollar Negative Most of the Day

Gold was only off a couple of bucks.  It started the day higher, 5-6-7 dollars, but in the face of this tremendous rally, gold kind of lost its bid.  But it didn't really sell off. It was only down a little bit.  So gold stocks in general were down, but not much.  The dollar spent almost the entire day negative.

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Rate and Review This Podcast on iTunes

Thanks to Listeners for 400 Episodes of The Peter Schiff Show Podcast

For those of you who say that Peter Schiff does Podcasts when the Dow is down, Dow Jones was up 547 points today.  This is my 400th episode of the Peter Schiff Show Podcast. I want to take a moment to thank my audience - everybody who has been listening to the podcast.  Especially to the people who have listened to all 400 episodes.  By the way,  if you missed a few, they're all archived.

Check out all the Archived Episodes of the Shows

Some people have been listening for a lot longer.  I was doing a daily talk show for 3 years or so. I started it after my failed Senate campaign to continue to get my ideas out there.  But I eventually did not have enough hours in the day to commit to be at a mic for 2 hours each day doing a live show, even though I enjoyed it - we had a lot of guests and I took a lot of calls. Before I ran for Senate, I did a once a week call-in show, Wall Street Unspun. Some people who are listening to the podcast go all the way back to the Wall Street Unspun days. A Special thanks to the people who have listened all of these years.

Please Take the Time to Rate and Review my Podcast

Remember, if you have been listening to my podcasts, certainly if you've listened to all of them, do me a favor and rate the podcast on iTunes or whatever platform you use to access my podcast.  Rate the podcast, make comments about the podcast, put 5 stars down there.

Market Up, But We May Still be in Bear Territory

There is so much overwhelming evidence that the bull market is over, and that's what I want to focus on. The housing stocks had a rally today but the auto stocks are still very weak. The economic data that I've been seeing has been weak but nonetheless, as I said earlier, the Dow was up 547 points, that was 2.17%.  But the NASDAQ Composite was up 214 points - 2.89% on the day. The Russell 2000, which had been getting beaten up was up 43 points today - 2.82%.

Gold Steady, Dollar Negative Most of the Day

Gold was only off a couple of bucks.  It started the day higher, 5-6-7 dollars, but in the face of this tremendous rally, gold kind of lost its bid.  But it didn't really sell off. It was only down a little bit.  So gold stocks in general were down, but not much.  The dollar spent almost the entire day negative.

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A Very Volatile and Technically Weak Trading Day for the Dow

Here I am for the third day in a row doing a podcast. It's market volatility that has brought me to the mic yet again. The Dow Jones down 525 points; a very volatile and technically weak trading day for the Dow. The market opened down, we quickly sold off, a couple of hundred, but then we rallied back! We got positive.  I think we were up a hundred, maybe more, and then going into the last hour or near the last hour we sold off hard.  the Dow was down I think close to 700, I'm not sure exactly, but then, we got a rally. Not all the way back to unchanged, but then in the final 15 minutes of so the Dow rolled over once again to close just off the lows. Down 525 points. Over 2% down. Not as big a drop as yesterday's drop, but coming on the back of yesterday's drop, it adds up.

Some of the Tech Stock Actually Rallied Today

The transports, not down as much, another 1.5% added to yesterday's loss. NASDAQ - some of the tech stock actually rallied today, so that helped the NASDAQ; some were down, though. NASDAQ down 93 points, 1.25%.  Russell 2000 down 30 points. That was just under 2%.

If the Stock Market Went down Enough, There Would Be a Bid in the Bond Market

The Bond market was actually up today.  Finally we had a day where people were buying bonds.  But I said this was going to happen. Eventually, if the stock market went down enough, there would be a bid in the bond market. That's exactly what happened. If the stock market stops falling, then the bond market is going to resume its descent. This is the same dance that we were doing earlier in the year, that eventually came to an end, but we're back where we started from.

So if we get stocks going up, then interest rates are going to go back up, which is going to scare the market. Now they're going to go back down, and so now people will buy bonds.

 

Our Sponsors:
* Check out Fast Growing Trees and use my code GOLD for a great deal: https://www.fast-growing-trees.com
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JOIN PETER at the New Orleans Investment Conference

https://neworleansconference.com/conference-schedule/

A Very Volatile and Technically Weak Trading Day for the Dow

Here I am for the third day in a row doing a podcast. It's market volatility that has brought me to the mic yet again. The Dow Jones down 525 points; a very volatile and technically weak trading day for the Dow. The market opened down, we quickly sold off, a couple of hundred, but then we rallied back! We got positive.  I think we were up a hundred, maybe more, and then going into the last hour or near the last hour we sold off hard.  the Dow was down I think close to 700, I'm not sure exactly, but then, we got a rally. Not all the way back to unchanged, but then in the final 15 minutes of so the Dow rolled over once again to close just off the lows. Down 525 points. Over 2% down. Not as big a drop as yesterday's drop, but coming on the back of yesterday's drop, it adds up.

Some of the Tech Stock Actually Rallied Today

The transports, not down as much, another 1.5% added to yesterday's loss. NASDAQ - some of the tech stock actually rallied today, so that helped the NASDAQ; some were down, though. NASDAQ down 93 points, 1.25%.  Russell 2000 down 30 points. That was just under 2%.

If the Stock Market Went down Enough, There Would Be a Bid in the Bond Market

The Bond market was actually up today.  Finally we had a day where people were buying bonds.  But I said this was going to happen. Eventually, if the stock market went down enough, there would be a bid in the bond market. That's exactly what happened. If the stock market stops falling, then the bond market is going to resume its descent. This is the same dance that we were doing earlier in the year, that eventually came to an end, but we're back where we started from.

So if we get stocks going up, then interest rates are going to go back up, which is going to scare the market. Now they're going to go back down, and so now people will buy bonds.