The Carnage Continues

It was another wild roller coaster ride today with U.S. equities going through tremendous price swings and closing dramatically lower on the day. Officially, today’s closing price in the Dow puts that index into corrective territory.

The Dow Jones Industrial Average traded to a high with gains of 352 points. It also traded to a low, which resulted in a 566-point drop only to recover slightly off the lows to close at 24,442.92 points, a decline of 245 points on the day.

The NASDAQ composite had a more significant decline by losing 1.56% in trading today, which is a net loss of 112 points and the index closing at 7055.17.

Truly the recent carnage and dramatic selloff in U.S. equities continues.

Cited as a significant factor contributing to today’s sharp selloff are realistic concerns about global growth and, more importantly, news on the United States and Chinese trade talks.

Today, Bloomberg reported that the U.S. plans more China tariffs if the Trump-Xi meeting fails. According to the Bloomberg Report, “The U.S. is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, three people familiar with the matter said.”

According to this report, new tariffs would be imposed upon China amounting to $257 billion worth of Chinese imports into the United States.

At an event in Indiana this Saturday, President Trump said, “We are in the middle of a pretty nasty dispute. We’re in a trade dispute -- I want to use that word because it’s a nice, soft word -- but we’re going to win. You know why? Cause we always win.”

Selling pressure in U.S. equities has had the net effect of strengthening the U.S. dollar and putting downside pressure on gold, silver, and palladium prices.

The dollar index has gained 3/10 of a percent in trading today and is currently fixed at 96.425. Gold futures basis the most active December contract is currently down $4.60 and fixed at $1,231.20. The most noteworthy characteristic about the range gold has traded in today has been the intraday low, which came in at $1,226.10.

This low matches within $0.30 of the 100-day moving average. The fact that gold pricing did not breach or close below that average indicates that price area is a level of support that at least for now gold has been able to hold.

Wishing you as always, good trading,