Oil backed off a little overnight, and the S&Ps opened a little higher again on more hope that the Straits would suddenly be opened by a miracle (and all that shut in production would suddenly come online, not to mention tankers arrive to pick up the oil after they've left the region).
When the miracle failed to appear shortly after the open and crude began marching higher again, the rally in the S&Ps began to fall apart, and the S&Ps would drift back to the lows of the week and eventually break them in the final hour to go out on the worst levels of the day and the week with a loss of half a percent.
BTC once again held up better than stocks and rose a percent. MSTR also managed to pick up a couple percent.
Commodities were down across the board (ex-oil), with the GCC falling over a percent. Platinum notably tanked 5 percent and appears to have completed a right shoulder of a large H&S top. Copper similarly fell 2 percent and also appears to have completed a right shoulder.
Part of the reason for that commodity weakness was another rally in the dollar, with the DXY picking up nearly a percent and surging to a new 10-month high.
Yields also edged higher again too, which probably didn't help matters.
Gold traded down to $5060 overnight and then bounced into the US open to eventually trade as high as $5120. From that high, the metal then rolled over and plunged to as low as $5120 as the dollar rallied. Following a bounce back up to $5060 again, the yellow metal then tanked into the equity close to make new lows for the day and went out near the lows at $5018, which also happens to be a new closing low for the move since the March 2nd peak and just shy of the intraday spike on March 3rd at $4996.
Silver similarly sold off overnight and then tried to recover into the US open. Like gold, however, its rally fell apart, and it would dive to just below $80. Following a bounce back up to $81.50, the white metal would then roll over with gold once again and plunged back to near the earlier lows around $80 for a loss of 5 percent. Like gold, that close was also a new closing low for the move since the lower high on March 2nd and just shy of the intraday spike low on March 3rd at $78.
The GDX opened at yesterday's low and collapsed to a new low for the move since the March 2nd high. Following a feeble attempt at a bounce, the GDX then collapsed into the close to go out on the worst levels of the session with a loss of 6 percent. That close also left the GDX just shy of Feb 5th low.
The correction in gold and silver and the miners that began from the late January high appears to now be set to potentially go into overdrive next week, or what Elliot wavers call the "C-wave."
The slow motion train wreck that is everything ex-crude continues, and the really bad news is that the last time things were trading like this and I left town for Spring Break to go to the beach with my family, like I'm doing next week, was the week of the crash in March of 2020 right before the Fed finally panicked the following Sunday!
On Wed we'll get the FOMC, and if asset prices continue to tumble early next week like I expect them to, there will be both cries for and hope for the Fed to "do something" to make the falling prices stop. But they won't do a thing; not yet.
If a panic then develops into the weekend, perhaps we'll get another 2020-style Sunday announcement that the Fed is going to print. They will make up some excuse like "we can't print oil" or "it's national security" or some nonsense. But basically they won't have a choice in the matter and will be forced into it by the markets.
For now though, sitting on the sidelines and watching (or being short) seems like the place to be, because there is no TACO or announcement that will suddenly change things, other than another bounce that gets sold.
My gold model remained at neutral. Sentiment measures notably still show people are waaaaaaay too bullish given the bearish price action.
Positions: I left my equity shorts unchanged and remain long IBIT.
Long GDXD and ZSL. I sold my SLV puts on the flush that created the low for the day in silver (got lucky) and then bought SLV 62 puts for Wed for 16 cents in the last hour before things rolled over again.
As I mentioned above, I will be on vacation for Spring Break all next week in Hawaii. That means there will be no evening letter next week, but Intraday Comments for subscribers will be posted as usual, although I may post the Morning Note the night before given the time difference (it's 3:30 in the morning in Hawaii when the US equity market opens). DMS will return to its regular publishing schedule on Monday, March 23rd.
