Today, if you were up at 4:30am, you were able to witness the biggest currency move in the history of man. Like an 18 year old heading off to college for the first time, the Swiss Franc was set free. Anyone whose been to college knows what happens next.
2,000 PIPS is a term normally utilized over a span of years, much like the DJIA rose 3,000 points that year, or the S&P 500 was up 14% in 2013. Currencies just don't move 15% in seconds. Just like the price of bananas doesn't jump 100% on your trip to the register to pay for them.
But we are slowly coming the grips with the nasty side affects of Central Bank manipulation.
The Swiss fixed their currency. The fix was in. They defended the 1.20 level on the EUR/CHF to the bitter end. But this morning, while all the traders were gleefully alseep dreaming of closing out their long positions after the Indian Interest Rate was cut and futures spiked 1% higher, the Swiss threw in the towel. They gave up. And what happened next is something that will go down in the annals or anals, whatever one you prefer, of Central Bank History.
Stock futures initially slumped, and then they rallied. My initial and current reaction? Shock. Disgust. Disbelief. and my thoughts on what this means for the market? More uncertainty. More selling. More volatility.
Stocks continued their descent today, India rate cut be damned. As I write this recap stocks are continuing their plunge lower. In audio I continued to talk about these wild price swings and also this massive Central Bank move. Niether are bullish for the market short term and we are seeing the uncertainty turn into selling. At some point the sharp bounces will fail to appear and this market will crumble to support areas.
The $QQQ broke under $100 today... not good as this level has been strong support previously.
Of course it's 2015 stocks are supposed to go up automatically:
Crude left the spike of yesterday's behind and went back into sell-off mode:
Bonds continued its strong start to 2015:
After hours Intel is lower, and stock futures are resuming their decline:
Before the bell Goldman Sachs reports earnings. I think the market remains in sell the rip mode. Monthly options expiration may lend support and also additional volatility, but I expect the selling to resume in earnest. Today key levels were breached and the Swiss just added more uncertainty to an already uncertain market.