Wed. a.m. 1/12/21.  U.S. Stocks down, bonds up.

Overnight:

Dow Jones -1.86%.  SP500 -1.9%.  Nasdaq -1.55%.  Small Caps -2.14%.  Banks -3.05%.

Twenty Year Treasury Bonds (TLT) +1.59%.

It was a perfect storm for stocks last night in the U.S.  First, Fed. Chair Powell said that the Federal Reserve would accelerate the Fed's buying of Bonds, i.e., turn off the spigot that has held up the U.S. Stock market (and other assets).  Secondly, Moderna CEO said it could be months before they could develop an effective vaccine against Omicron.  Thirdly, economic news was poor for stocks with the Chicago PMI and Consumer Confidence falling to nine month lows.  Stocks sunk to the canvas for a 10 count.

Slow Stochastics for all five charts above are now down in the over-sold position.  They can stay there for extended periods of time.

SP500:

The short term down trend continued last hight.  The bottom line of the PRT Bands failed as support.  It wouldn't take much more for the bands to turn from yellow to blue - bearish.

The 50-Day MA (blue dotted line) coincides with a major horizontal support level.  That could be a target for this downside move.

Commodities:

Commodities couldn't escape last night's carnage.  Commodities Index -2.75%.  Energy -3.76%.  Base Metals -0.57%.  Gold -0.67%,  Volumes have been high lately so we could be close to a bottom in Commodities.

Iron Ore +0.2%.

Overnight Oz Futures -0.5%.

Expect more downside today.