The plunge in the Dow after the first quarter runup...has many historical precedents.
It is traditional for the markets to plunge right after the 401k and retirement funding deadlines are wrapped up around April 15.
Indeed, the first quarter run up is what I call the Sucker Season, because the market masters always run up the market when their retail customers are flocking...and then they "pull the plug" after everyone is "in." It happens every year about now.
So, the current unpleasantness could just be the usual seasonal "sucker flush" wherein retail customers are flushed out, after buying in at the "top."
BUT THIS IS NO ORDINARY YEAR...
And their could be other factors at work.
The gold run up was new and very scary to the central bankers... Higher gold prices are really a vote of no confidence in the job the central banks are doing on monetary policy.
The oil spike and the geopolitcal disasters in the middle east are worst this year than normal.
And it is an election year where the incumbent party is expected to do very very poorly...even worse that in a "normal" off year election.
The dollar is weak and the deficits are strong. The housing bubble was bubbling til recently. And yields on Bank CDs are approaching 5%++ for the first time in years.
And we have a new FED chairman that has not been tested and approved by Wall Street.
SO WHILE THERE ARE PLENTY OF REASONS FOR A SEASONAL PLUNGE IN THE DOW ABOUT NOW.
THERE ARE ALSO UNUSUAL CIRCUMSTANCES AFOOT THAT COULD MADE THIS A WATERSHED TIME FOR THE MARKETS.
THE PROOF THAT THIS IS NOT BUSINESS AS USUAL IS IN THE GOLD AND OIL MARKETS...GOLD EFFECTS THE CURRENCY MARKET AND OIL EFFECTS THE REAL ECONOMY.
AND IN BOTH CASES THERE ARE STRONG INFLATIONARY TENDANCIES SHOWING...
IF THIS IS "THE BIG ONE"...THEN THIS IS NOT A DIP YOU WANT TO BUY.
THE WILLINGNESS OF THE MARKET MASTERS AND THE AMERICAN ELITES TO SUPPORT THIS MARKET WILL BE TESTED IN THE COMING WEEKS...
BUT IF THE SMART MONEY STARTS LEAVING...THE SMALL AND RETAIL INVESTORS WILL BE STUCK HOLDING THE BAG...
...YET AGAIN.
