The Columbus Day Market Massacre

If you’ve been a long-time follower of mine, you know that I’ve consistently made two points over the last 10 years. First, technical analysis doesn’t mean shit—it’s a backward-looking tool that has limited use in predicting the future. Second, I’ve often said that some days you wake up and everything is just different than it was the day before.

Today made both points. Along these lines, I didn’t see too many technical analysts, CNBC guests, or sell-side dildos predicting what would happen today—when the market erased essentially an entire month of gains in eight trading hours. It was the old adage of “stocks taking the stairs up and the elevator down” in practice.

My subscribers know that I’ve been writing about how precarious this market is—more aggressively over the last few months—noting massive looming problems in subprime auto, private credit, commercial real estate, and overvalued tech stocks: "End Of Empire Feel": QTR On Bitcoin News

That’s to say nothing of what could be a $2 trillion bubble in crypto. I’ve laid these thoughts out in a series of podcasts and articles, some of which I’ll list here for your convenience:

Today, that massive bubble found a pin when President Donald Trump responded to China’s move to essentially weaponize rare earth exports after China said this past week that it was restricting shipments of key rare earth elements used in semiconductors and defense applications.

Trump is a tit-for-tat guy, so his response was always going to be to ramp up tariffs to 100%, as he did after the market closed on Friday—causing another 1% move lower after a 2%–3% drop, depending on which index you look at. The real question remains whether this is China’s all-in moment to serve the United States a shit burger and really go to war with the dollar, or just a move to gain leverage ahead of the Trump–President Xi meeting happening in days.

My sense is the latter. But one thing nobody was talking about today—and that I want everyone to be aware of—is that I’ve long suspected China would eventually reveal larger-than-disclosed gold holdings and essentially “flip a switch,” deciding one day to wage full-on war against the U.S. dollar. I’m not saying that’s exactly what’s happening now, but if they were to do it, this is how it would start. The weaponization of rare earth minerals—vital not only to our quality of life in the U.S. but also to our national defense—is a major power play by President Xi. As my friend Andy Schectman and I have long speculated, a declaration of war against the dollar would happen over a weekend—likely on a Sunday—and result in catastrophe on Monday: U.S. Dollar & Sovereign Debt Endgame

I’m not saying that’s the case; I’m just saying nobody is talking about it, and people at least need to be aware of it. Putting aside what all of this means long-term, let’s focus on heading into next week, and what am I looking at to buy if things get mauled? See my full list and market outlook over on my blog here.

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