Little Big Horn Battlefield
On this day in 1876 several hundred men, led by an overly confident Lt Colonel George Armstrong Custer, U.S. Army, rode into an area in what is now southern Montana near the Little Big Horn river.
They engaged an Indian village there and grossly underestimated the strength of their opponent. They ran into several thousand, very unhappy Lakota Sioux and Cheyenne Indians.
In what is now known as Custer’s Last Stand, Lt. Colonel Custer and about 210 of his men, were completely overwhelmed and wiped out.
In the mid-1980s I read a very detailed account of this event in a book called “Son of the Morning Star: Custer and the Little Big Horn” by Evan S. Connell. It was very good.
Bull’s Last Stand
As I thought about Custer’s Last Stand, I thought about the stock market this week and the events surrounding the “Brexit” vote in the UK. I wondered if the market’s eruption in bullish enthusiasm on Thursday, might have been the bull’s last stand.
The rally had actually started Thursday June 16. On that day Parliament member and supporter of the “remain” group, Jo Cox was killed by a supposed supporter of the “leave” group. The real motive for this horrific murder is still unknown.
Both sides called off campaigns for a short while and the stock market reversed its downtrend and rallied. This rally then continued throughout the next week and culminated in the bullish orgy of buying on Thursday that ended with the S&P 500 up nearly 28 points for the day.
And why was the market up so big on Thursday? Because a poll was released that showed the ‘remain” campaign as winning by a few points AND the betting with bookies in the UK was heavily on the side of “remain”.
But on Thursday evening as the results started to come in, the stock market futures began to sell off in a huge way as they realized the move on Thursday was wrong.
Markets Decimated
On Friday the markets around the globe were completely decimated:
- The British Pound plunged to a 30 year low
- Japan’s Nikkei 225 dropped 8%
- German DAX was down 6.8% (10% at its low)
- S&P 500 down 3.6%
- France down 8% (10% at its low)
- Italy and Spain both down 12%
Now the bear camp isn’t fully in control yet, but it sure looks to me like the bull’s last stand happened on Thursday. Several country indices have broken the January/February low. Should the selling continue and that low gets broken in the United States…all hell will break loose.
In this short video I review the Dow Jones Industrial Average and the Dow Transportation average, a key indicator, several key market ETFs and then check in on Goldman Sachs, Citigroup and Deutsche Bank. This is just a small version of what my Insider Members get.