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Fleck's Thoughts
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S&P 5002127.02-1.48
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Dollar Index95.57+0.5
Euro Spot1.12-0.15
Japanese 10Yr-0.02+0
Long Bond 20-year165.5-0.77

TINA Will Become TINWO


Overnight stock markets were uneventful, while bond markets rallied, for the most part, though they all flipped over after markets got weak here. However, despite that uneventfulness, today was similar to Friday in that it was quite interesting. Starting early last evening, the SPOOs declined about 0.3%. That decline is nothing, but given that the market has been so moribund for months, it was noteworthy, and led to a 1% decline literally in the first hour.

A Little Can Go a Long Way Again, given the deadly dullness we have experienced over the last couple of months, I think that weakness is meaningful, and it certainly means that a lot of folks have quickly become trapped on their recent purchases. Thus, even lower prices most likely lie right in front of us, although there is the FOMC wrinkle next week, at which time the Fed will tell us it has no intention of hiking rates and we will probably have a relief rally -- but a week could turn out to be a very long time.

After the early weakness, there was no bounce, and the selling continued such that by midday the indices were about 1.5% lower. Bonds sold off, too, instead of rallying, possibly indicating pain in the "risk parity" world (an accident in waiting if ever there was one).

In any case, with an hour to go, when I had to leave, the market was sitting back on the lows, down about 1.5%. With both stocks and bonds leaking, even after it has become clear that there will be no rate hike, implies to me that the stock market could continue to see selling until they fall enough to get the QE4 drums started. Away from stocks, green paper was stronger, fixed income (as noted) was weaker again, oil lost 3%, and the metals were weaker, with silver losing 1.5% to gold's 0.75%.

What's In a Name? Today's headline refers to the fact that so much money has poured into the market as a consequence of the ridiculous battle cry of TINA: "There is no alternative." My belief is that everyone supporting that line is liable to find out in the not-too-distant future that a more accurate acronym would be TINWO: "There is no way out."