This sent the market reeling to the downside, and it is likely that stretched valuations among AI techs and other speculative areas of the market where we have seen extremely high PE-expansions were in need of a bit of a snapback. And snap back they did as the NYSE Composite Index busted 50-dma support and both the NASDAQ and S&P 500 appear set to test 50-dma support on Monday. After the close on Friday, Trump confirmed that 100% tariffs on China would go into effect on November 1st, which we assume gives him plenty of time to "chicken out" under the right circumstances. China may also acquiesce on some points. Remember that stock and Bitcoin/crypto markets dumped in April after Trump set the tariff rate on China to as high as 145% in mid-April which turned out to be a major low for markets. A truce reduced most tariffs and markets continued to bounce sharply.
The group chart of various market sector ETFs below gives a fairly complete picture of the carnage seen on Friday. Breadth was atrociously bad as Advancers were swamped by Decliners 382 to 2256 on the NYSE and 717 to 3901 on the NASDAQ.
Spot Gold ended the week at $4,011.68 an ounce, its first week above $4,000 in history. On Friday Spot Gold pulled down near 10-dma support which it has obeyed all the way up since breaking out in early September. COMEX Gold Futures ended the week at $4,035.50 an ounce.
Spot Silver also posted new 14-year highs this week, posting a new closing high on Friday as it closed precisely at $50.00 an ounce. COMEX Silver Futures are trading down at $47.40 an ounce as physical supply in London is lacking. The London Bullion Market (LBMA), a key hub for physical silver trading and spot price discovery, has been grappling with acute shortages of immediately available physical silver metal. Demand from industrial users and investors has outstripped supply, pushing spot prices up independently of U.S. COMEX Futures. Silver continues to hold above 10-dma support as it has since breaking out in late August.
While precious metals traded higher on Friday as investors reached for lifeboats, Bitcoin ($BTCUSD) was trashed as sellers slammed it all the way back to major support at the 200-dma. $BTCUSD printed an intraday low of $105,833.75 before it bounced sharply to end the day at $112,774.45 on Friday at the time of this writing.
Bottom line - investors should review trailing stops and selling guides if and as this market potentially continues to sell off. At the same time, expect volatility to rule the day as the trade-related news flow spices up.The Market Direction Model (MDM) remains on a BUY signal.