Monday stocks rose 0.4% in Asia and just slightly in both Europe and the U.S. on low volume. This was enough to drag the Dow Jones Industrial Average below the 17,000 mark again. Here’s the latest on the corporate stock buy-backs that continue to put a floor beneath a floundering stock market. Precious metals and their miners recovered from the carnage of the previous trading day gaining about 2% while gold moved above the $1200/oz mark. Tuesday, stocks in Asia again rose 0.4%, but in Europe and the U.S. they fell 1.5% on low volume while the VXO shot up nearly 14% to close at 16.06. As “investors” fled stocks, they bid up bonds sending the 10-Year U.S Treasury Bond yield down over 3% to close at 2.35%.
Wednesday, stocks in Asia fell 0.7% and in Europe 0.8%, but in the U.S. They shot up strongly at the end of the day to close up 1.5% on low moderate volume. The reason for the moonshot was the release of the latest FOMC minutes. The VXO plunged 12% to close at 14.03. Precious metals rose about 1%, but their miners exploded upward about 8%. Thursday, the stock rally from the West spilled over into Asia with a 1% rise. In Europe, they fell 0.4%, but in the U.S. they plummeted 2.2% on low moderate volume. The VXO shot up over 24% to close at 18.10 while precious metals miners collapsed 4%.
Friday, stocks in Asia caught the winds fear from the West and tumbled 2%. In Europe, the decline was 1.6% and in the U.S. 1.1% on moderate volume. That level of trading is noteworthy in this crazy market and gives further weight to the argument that this tumble has further to go. Add to that another 11% rise in the VXO fear index to close at 20.20.
It has been nearly two years since we’ve seen a closing level that high. For the week, the VXO fear gauge shot up 49% as stocks shed over 3%, and the 10-Year U.S Treasury Bond yield fell nearly 6% to close at 2.31%. If we’ve finally reached the turnaround in stocks, this is simply a precursor. The real action yet to come will make this little decline look like a walk in the park as the mountain of credit supporting this farce unwinds and implodes.