Avalanche victims allegedly drank the brandy in the St. Bernard’s barrel to say warm while they waited for rescue. After this past week, I am sure many market avalanche victims did the same.

The dog is of course, the brown earth dog, or the symbol in the Chinese New Year for 2018-2019. And he comes not only with whiskey, but with water-as in a forecast of a water element yielding 5 years of a bear market. Of course, I always take these astrological warnings with a grain of salt. However, given how the past week ended, even a brandy-carrying St. Bernard offers little relief in this avalanche.

Sadly, the S&P 500, NASDAQ 100 and the Dow all closed under their 50-week moving average for the first time since either Spring or Fall of 2016. Transportation, Semiconductors and the Russell 2000 closed under their 23-month moving averages. Granted, the month is not over yet.

With Halloween a fitting end for this month, should we plan to trick or treat in a St. Bernard costume?

Familiar readers know that I have been carefully watching the 100-year low ratio between equities and commodities. Here is an update.

The U.S. dollar is a key component. On Friday, right after the GDP number came out, the dollar rose to a new 2018 high. Then, it proceeded to sell off closing with what looks like a bearish engulfing pattern. Should this confirm, what is already starting-the rise of commodities beginning with oil-will continue. Furthermore, the Fed may be forced to hold back on a December raise in rates. Nonetheless, any softening of the yield is also good for commodities.

No amount of brandy will help those stuck on equities. Lower rates and a lower dollar will be seen as a negative for the market.

Folks have asked me what they should watch.My short list:

USO for oil. GLD for gold, DBA for agriculturals, DBC for a combo of oil and metals. And USCI for a general US Commodity index look.

S&P 500 (SPY) 257.83 the 23-month MA next support. 274.50 the best overhead resistance

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