S&P Dips As Bitcoin Rips On 10th Anniversary Of Stock Market Peak

There's a chance tax reform may not get done!!! Inconceivable!!

10 years ago today, The Fed minutes were released sparking a buying frenzy pushing The Dow above 14k to a new record high - supported by a dovish Fed and a convinced public that job growth was recovering and all would be well. It turns out that the peak for the market that was followed a greater-than-50% plunge in stocks.

That week, U.S. President George W. Bush said the figures signaled “a vibrant economy” but a poll of top Wall Street economists found more than half still think the Fed will trim rates again this month to help the economy get past a housing slump and a surge in mortgage defaults. U.S. employers added 110,000 jobs in September and August’s job losses were revised into a gain in a Labor Department report on Friday that lifted some worry about a recession in the near term.

CNN Money wrote on the day of the peak...

Stocks drifted higher through the morning, flattened out in the early afternoon and then began to rise as investors digested the minutes from the Sept. 18 Fed meeting, released at around 2:00 p.m. ET.

 

"I think the market had a knee-jerk reaction to the idea that the Fed can cut rates more, if they need to," said Steven Goldman, market analyst at Weeden & Co.

 

At the Sept. 18 meeting, central bankers cut interest rates for the first time in 4 years. The minutes showed that the decision to cut the fed funds rate by a half-percentage point cut was unanimous, with the central bank worried the housing implosion and credit market crunch could hit consumers and the broader economy.

 

Also important to stock investors: the minutes showed that the bankers were a bit more confident about a sustained inflation drop, provided that the dollar doesn't keep falling.

 

Stock investors have been looking for evidence that the Fed will cut the fed funds rate by at least another quarter-percentage point, perhaps at the next policy meeting, which ends on Oct. 31.

 

The minutes seemed to provide that evidence because of the combination of the concern about the economy and the diminished concerns about inflation.

 

Goldman said that while the minutes didn't particularly reveal anything new, investors were probably relieved to see the central bankers "confirming what people have been thinking anyway."

So what would have happened if you bought 10 years ago...

Gold remains the winner since the prior market peak with stocks outpacing bonds and crude having been crushed.

Which is ironic as gold was today's biggest winner (as China came back from its Golden Week holiday) as stocks, bonds, and the dollar trod water on Columbus Day...

 

Stock markets drifted lower in the last hour without RP algos to pull off bonds and levitate stocks... (Small Caps worst day in 6 weeks before the standard panic-bid into the close)

 

And note that VIX was notably bid...

 

Retailers, Financials, and Healthcare were the biggest losers...

Health-care stocks lead to the downside on a cascade of negative news for everything from medical devices, to managed care, to drug distribution. Reports over the weekend that Trump was seeking to loosen regulations in health insurance which could lead to lower premiums has sent most of the managed care names into negative territory.

One quick chart to highlight well-timed RRR cut from China right before the Golden Week Holiday that sparked a relentless surge in US stocks... and which now they are back, equities start selling off...

 

It seems the Trump-Corker feud is indeed having an effect on the odds of tax reform...

 

FANG Stocks rolled over once again after the standard opening gap rip...

 

Perhaps the funniest movement of the day was the dual dip and rip of AMZN and GOOGL when Amazon headlines hit saying it is "Considering a serious bid against YouTube"...

 

The bond market was closed but futures signal a modest bid for 30Y bonds (+1-2bps) with the short-end flat...

 

While the dollar index went nowhere on the day - drifting modestly lower...

 

USDJPY snapped below key support, dragging stocks in sync...

 

The Turkish Lira was chaotic (after tit-for-tat visa wars)...

 

And Cable pushed notably higher, dipping around May's speech...

 

Gold and crude both bounced on the day...

 

While the dollar index went nowhere, Bitcoin surged back above $4800...

 

Bitcoin market cap popped back above PayPal...

 

As the rest of crypto space was dumped...

As @CEOCoinex noted, everyone is liquidating portfolios to purchase bitcoin so they can get the Free shares from the chain split. Watch for huge rebound after.

Comments

Gold is money … Mon, 10/09/2017 - 16:13 Permalink

If you buy today. You have a least two more years in this bull market. As long as EU is falling apart and the smart money runs into the arms of US equities the Bull will run. Mark my words Barrons wrote a quick article on Martin Armstrong and his call in 2011 for a long running bull market. The article was essentially sarcasm/tounge in cheek. So he was right. With the macro stuff the guy is always right. google it for yourself.. A Market for Pi in the Sky? barrons 

HRClinton CoCosAB Mon, 10/09/2017 - 17:27 Permalink

Re... "cripto... The new playground for SCOUNDRELS!"Yes, that's what hicktards said, when the Banksters introduced a whole new Monetary System on Aug. 15, 1971.The System can stay solvent longer than you can.Moral: When a once-in-a-lifetime change in the Monetary System occurs, smart money jumps in EARLY, while the chickenshits cluck and screech on the sidelines.Listen up, ye crypto-hating dumb clucks...Crypto isn't a new Product or Asset (Tulips). It's a whole new MONETARY ECOSYSTEM.  Just like the Internet became an INFORMATION ECOSYSTEM. If you cannot grasp the significance of that, then you truly are hopeless Flat Earthers. Go shave your goddam uni-brow! (Sorry, but I'm out of patience with you lot)

In reply to by CoCosAB

tmosley f.thomas Mon, 10/09/2017 - 20:02 Permalink

Depends entirely on how quick they are to update the technology. Worst case for bitcoin is it gets supplanted, then the big money moves out and into the successor tech, and then with less pressure the dev team can turn it around and it winds up being in the top five long term. Best case is that it "wins" and supplants all forms of money, currency, and debt. ~2500x move from here to that point.No reason not to own it as well as any technologies that you think are better.

In reply to by f.thomas

CoCosAB f.thomas Sun, 10/15/2017 - 09:19 Permalink

they are waiting for ALL THE OLD PEOPLE TO DIE! Mainly those that do not want to use SMART ROCKS and other electronic shit to buy FOOD and other stuff!they are waiting for THE ENTIRE WORLD TO BE CONNECT TO THE A.I. GRID, that they do not control!they are waiting for the Weather not to fuck up the Grid!they are waiting for the SUN not to FUCK UP the entire grid and send the human animals to the original natural condition! So lets WAIT!

In reply to by f.thomas

HobbyFarmer Mon, 10/09/2017 - 16:46 Permalink

I can't remember the last conversation I had with anybody about stocks.  Between 1995 and 2008; people talked about them all the time.Socializing the losses (so the bankers could have their bonuses) seems to have burned a lot of people the wrong way.I realize this is just my experience...but, those around me seem well aware it's a scam: privatize the gains and socialize the losses. 

Automatic Choke HobbyFarmer Mon, 10/09/2017 - 17:17 Permalink

Agreed.   There is no price discovery anymore, there is no market, it is all political bullshit.I have a group of friends who used to get together for market arguments.....been silent for years now, nothing to discuss.I used to subscribe to Valueline.  Valueline, remember that?   Fundamental investing?  (look it up in your ancient history books...) 

In reply to by HobbyFarmer

adr Mon, 10/09/2017 - 17:06 Permalink

Imagine if when a stock splits, instead of getting double the shares at half the price, you get double the shares and the stock stays at the same price. Bitcoin clones itself and you get an equal number of new coins you can sell and keep 100% of your initial investment. It's completely insane, but it sure does get people to buy in. The new split is 100% of the reason for the latest bubble climb. Anyone that still believes Bitcoin isn't a scam is beyond help. Legitimacy doesn't matter when money is being printed for free. 

Anteater adr Mon, 10/09/2017 - 17:33 Permalink

And if you bought 5 years ago, or any year after, PMs were the worst of any investment available, except maybe Bernie Funds.Next it will be BTCs, and 10 years from now, some cherry-pickhack will tell how you 'could have made a fortune with BTCs!!!'Invest in goat bone soup and potato sack clothing, and go long!!

In reply to by adr

Justin Case bluerivercard Mon, 10/09/2017 - 18:40 Permalink

The use of digital currency has been on the rise lately. Since its arrival, the value of cryptocurrency has increased by an astonishing 800%. With this much value, it has attracted millions of users towards itself. These users also include some hackers and web pirates who would do anything to get their hands on the digital currency. This means that they can even hack your systems in order to mine the digital currency. However, there is always a way to prevent such actions. Recently, news has been circulating the web that the website thepiratebay.org is using the CPU power of its users for crypto-mining.

There are two ways you can protect your computer from becoming a crypto-mining machine. They are:

Go find it yoar self.

In reply to by bluerivercard

Buddha 71 Mon, 10/09/2017 - 18:21 Permalink

so what happens to bitcoin when the power is cut ? what happens to a microscopic digital file on somebody's random hard drive ? what happens when the bitcoins you own, just disappear, like they did on mt gox and others, hacked ? or stolen by the actual admin ? gone daddy gone. how can bitcoin be represented by an ETF ? what will supply the asset value ?  bitcoin can only be expressed in terms of its relationship with other currencies, bitcoin has no intrinsic value, no asset value. traditional currencies typically represent the related economy. bitcoin is a very volatile trading vehicle, like vix, except that bitcoin doesn't represent anything other than bitcoin. most don't care, since all doubters are treated like we don't understand, however all of the above facts and questions are always answered with glib bullshit replies. like the dollar is worthless, since the fed keeps printing, however if the power goes out, you can still buy a cheeseburger and shake with a few dollars, unlike bitcoin. so trading is actually the only function of bitcoin and other cryptos. cryptos are algo driven, and has no correlation with anything really. fun to trade.

Justin Case Buddha 71 Mon, 10/09/2017 - 18:44 Permalink

Ruining bitcoin is actually a simple economic process. Central banks can merely create counterfeit currency to buy bitcoin sporadically over time. This massive scaling would push prices up until the currency reaches a “bubble.”

Recall that current iterations of bitcoin only allow it to handle seven transactions per second. This is a little slow. Anything more than that and you have a massive jamming problem. This is a reason why bitcoin can never be a world currency.

Central banks know this and can clog up bitcoin trades by conducting a monstrous coordinated sell-off simultaneously of about five to ten sell orders per second.

This would pop the economic bubble and drive the cryptocurrency to almost zero.

Immediately, this would wipe out millions of assets. One thing to recognize is that the value of bitcoin is determined by the last price of the day. So, if, for example, the price for bitcoin was at $3,000 each one day but it stooped to $300 per unit on the same day, everyone would have lost 90 percent of their currency value.

This would trigger another wave of automatic sell orders which would further flood the transaction system.

In human time, we are talking of millions of dollars lost in mere seconds.

In reply to by Buddha 71