Art Cashin – Wild Futures Trading This Morning And Yesterday’s 800 Point Plunge In The Dow

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Legend Art Cashin discusses this morning’s wild futures trading and yesterday’s 800 points plunge in the Dow.

Global Panic: The Worst Is Yet To Come
August 15 (King World News) – Art Cashin: On this day (+3) in 1587, as you probably learned in the fourth grade (from your particular Sister Herman Joseph), the first “European” child was born in North America. (My particular Sister Herman Joseph would say things like “Mister Cashin, history, like life, is analogous, learn from it!” But more frequently…”Cashin if you can’t learn dates and events you’ll be cleaning erasers in this building into the next century”…she was only off by a couple of years….but as the guy who paints the Astro-turf says…I digress.) 

Anyway, the story of Virginia Dare (above-mentioned baby) is fascinating on its own. Her parents (and in fact, the entire settlement) had arrived just a few months earlier. They were the second group sent by Sir Walter Raleigh (good manners, soiled cloaks) to solidify his land claims and what Raleigh sniffed to be profits in that brand new import from America….tobacco. (Prior settlement attempt was rather heavy on English gentlemen but more than a bit short on working or servant types so — You!…turn this blasted boat around and take us home.) 

However, fearing the loss of his tobacco monopoly, Raleigh sent a new group of settlers under the command of John White. He was one man in England that everyone thought could make a settlement work. Raleigh also sent 120 new settlers including White’s daughter, pregnant with VD (…er that’s Virginia Dare, Sister. Please put that ruler down). Since they arrived too late to plant, supplies were short. So they had to send someone back to England and in a pre-colonial version of the Peter Principle, they sent White. When he got to England, no one would talk to him since they were all busy fighting the Spanish Armada. So White didn’t get back to Roanoke for two years. And when he arrived, there was no trace of the settlers. No corpses, no graves, no skeletal remains. Only one word scrawled on the wall of the settlement “CROATOAN.” Since that was similar to the Indian name for a nearby island, he searched there. But then and for the 4 centuries since, no one knows what became of Virginia Dare or the lost colony of Roanoke. 

(And, if someone would distract Sister Herman Joseph for a minute, I’ll tell you a secret.) Records indicate that the first European child born in North America was actually “Snorro” the son of Thorfinn and Gudrid Karlsefni. He was born in 1002 A.D. on Lief Ericson’s expedition to Vinland. But you probably knew that already. 

The markets were giving birth to a new set of worries Wednesday. Worse than expected economic data out of China and Germany raised fears that global trade trouble could be pushing the world into a recession. 

Adding to that the yield curve between the two year treasury and the ten year treasury “inverted” – meaning the yield on the ten slipped below the yield on the two year. Over the past 50 years, every US recession has been preceded by an inverted yield curve. 

The financial media became instantly obsessed with the inversion as though it, alone, was the cause of Wednesday’s heavy selling in stocks. 

A lot of the credit (blame) for the selloff was the very weak data out of Germany and China, back-dropped by demonstrations in Hong Kong and Russia as well as troubles in Italy, Argentina and Kashmir. 

At any rate, the Dow gapped lower on the opening and inched lower over the course of the session. 

The pressure on stocks was unrelenting and several technical levels failed to give any solace. The Dow easily slipped through its 200 day moving average (circa 25585). 

I was on CNBC several times throughout the day and laid out several levels that we “cocktail napkin chartists” were looking to. On the Dow, it was the August intraday low (circa 25440). The equivalent level in the S&P would be 2822 and then the 200 DMA around 2795. 

The selling intensified late in the day as there were some indications that there might be over a billion dollars for sale on the bell. 

That helped the Dow close almost exactly on the day’s low. The same was true of the S&P. 

All in all, there was some technical damage that may make some traders hesitant to jump back in. 

Overnight And Overseas – Asian equity markets closed rather mixed despite Wednesday’s sharp sell-off in New York. Tokyo closed down about 300 Dow points but Hong Kong and Shanghai saw modest to moderate rallies. India was closed for a holiday. 

In Europe, equity markets are under pressure again. London, Paris and Frankfurt are all trading moderately lower. 

Among other assets, Bitcoin is softer again, trading just a shade over $10,000. Gold is slightly higher, trading around $1,530, while crude is a bit weaker with WTI trading near $54. The euro is a touch higher against the dollar, while yields move lower again. 

Consensus – Pre-opening Thursday, U.S. equity futures have whipsawed wildly up and down.

Pre-dawn, the Dow looked like it might open up about 150 points and then China announced it would retaliate if 

the U.S. imposed the remaining tariffs on September 1st. 

In instant reaction, the Dow futures collapsed to a -200 point opening. Then Walmart announced good earnings and futures improved slightly. 

Then there was a somewhat vague report from Chinese media that China’s trade negotiators still hoped to meet the U.S. halfway. That spiked futures to a +150 outlook. Pass the Dramamine. 

The 30 year Treasury now yields less than 2%, the lowest level in U.S. history. May you live in interesting times! Stick with the drill – stay wary, alert and very, very nimble.

Celente – Global Panic Heating Up But Worst Is Yet To Come
READ THIS NEXT! Celente – Global Panic Is Heating Up But The Worst Is Yet To Come CLICK HERE TO READ

More articles to follow…

In the meantime, other important releases…

Dow Craters 800 Points As Panic Trading Continues Across The Globe, Plus A Bold Prediction CLICK HERE TO READ

Global Disaster Unfolding As Dow Plunges 600, World Bond Yields Tumble And Gold & Silver Surge, But Here Is The Biggest Surprise CLICK HERE TO READ

“There’s Something Bigger At Work Here,” Inflation Warning, Plus An Important Look At Gold & Silver CLICK HERE TO READ

Pomboy Warns Of Hysterical Blindness In Markets, Wild Trading In Gold, Cashin – A Whole New Set Of Fears To Digest CLICK HERE TO READ

One Of Gerald’s Best
One of Celente’s best interviews this year has now been released and you can listen to it by
 CLICKING HERE OR ON THE IMAGE BELOW.

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