What’s the difference between a cavernous hole in a mountain made by Mother Nature and a cavernous hole in the market made by understandable jitters?

A hole made by Mother Nature occurs over hundreds of thousands of years. Erosion.

A hole made by understandable market jitters occurs in a matter of months, days, hours. Corrosion.

Yesterday, treasury yields softened. Today, they fired until they softened.

This week is yet another Fed meeting. Once again, a possible change in monetary policy is on tap. Only what makes this time different?

The Market has a brand-new bag of worries and its brand ain’t Prada. (Unless you think the Devil wears it.)

This Presidential election and the ramifications for the equities and U.S. economy have become enough dynamite to blast a hole in the market.

Last night I asked you, “What Does “Shake it Up” Mean for Your Money?”

We didn’t have to wait but a day to find out.

For over a year I played with the notion of Terror at 18,000 in the Dow the altitude when a Gremlin appears. The Dow ran up from that number in July. On November 1st, the Dow trades just there.

Whatever the Gremlin looks like to you, if it sits on the wing of the plane and the Dow cannot retake 18k, what should we investors do?

Keeping a cool head, I think about “risk on” versus “risk off.”

Let’s begin with Treasury Bills. Will they remain a “safe” haven? My knee-jerk response? That nagging word again-stagflation. I do not foresee Treasuries as particularly safe going forward.

As the FOMC begins this week, doubtful we will see a rate hike. However, doubtful-keeping rates the same will do much for the equities market either.

Will the metals be safe? Initially yes. In 2008, Gold dropped along with the market. Once QE was announced, Gold recovered. By the spring of 2009 when the S&P 500 went into a Recovery Phase, Gold roared.

Why? QE. So, if the FED does nothing, that could temper the Gold. If they go the way of negative rates, I imagine Gold will rally.

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