Again. So youre not looking at a bounce back. At least not in the early trade. After you have such rough seas like that its not unusual to see it the next morning. But right now at least it looks like the dow is indicated to open down another 77 points. Yesterday closing below 17,000 for the First Time Since october. The s p 500 is down another 8 points after closing down by 2 yesterday. Check this out, though, the dow negative on the year. S p is negative on the year as well. This is decline of 2 yesterday for the dow. 16990 is where it closed at the end. Its at risk of the annual winning streak for six years in a row. We should point out the five dow components hitting 52 week lows yesterday includes utx, conoco, exxon and Procter Gamble an intel. Japan was down by 3 as well. Shanghai composite down and hang seng composite down by 1. 5. Chinas august flash factor pmi. Thats a key Manufacturing Index. It dropped to a 77 month low. Do the math on that, thats more than six years. Domestic export demand fell as well. The nikkei tumbled below the 20,000 mark to close at a 3. 5 year low. Lets get a check on the early trading in jurors and again some red arrows here. Nothing thats down by more than 1 at this moment but the dax is down by about. 5 . Cac in france is down by. 8 and in italy down by about half a percent. Other than that, how was the play mrs. Lincoln. Exactly. In a flight to safety this morning, gold prices hitting the highest levels in more than a month. I saw a quote there. Its getting the bid from lower Interest Rates. Were going to talk about that. Copper has been dropping on pace for its 7th straight weekly loss. Traders point to fear about the chinese economy. Copper trading at 22915. One of my guests insists we take it out all the way to the millionth decimal point. Lets check on currencies right now. The euro stronger overall. 11272 but right now its weaker against the dollar. The yen weaker, 12299. As for the all important ten year yield we were at 207. Now 2085. Were in that area there and significantly below that 2. 10 mark there. Okay and if you had any doubt about how crazy trading is right now just check out the vix. Soaring 26 yesterday. Its currently tracking its largest monthly gain since, i hate to say it, september 2008. So a little history. Always remarkable how august somehow always brings a thunderstorm of volatility right. And september. And september. Right. Although historically for the last ten years if you bought august september, by october you were up. Except for 208. It could be bargain hunting tun. Why do you think volatility happens in august . Is it because fewer people are here . Theres always something happening unexpectedly bad in august and it gives it the extra push. Keep going to jackson hole and thinking im getting fishing in and it ends up being the biggest story of the month every time. Its your fault. Im leaving shortly to go there and all of a sudden to me its a huge story next week. What about janet yellen. Even without janet yellen. Stan fisher is giving a speech on inflation. What does janet yellen do while everyone else is there . I imagine shell figure out not everyone is going but yeah. We do have every angle of this story. Todd gordon of trading analysis. Com hitting the equity markets for us this morning. Were going to talk broader markets in a moment and tell us about what happened because it seems like this came almost out of nowhere. Its been building after china devalued the yuan. Is it over now . What has happened really . Has any real damage been done . Im not sure. Theres a lot of talk about whether the trend has been broken and i really dont think theres been any technical significant damage done. Theres a lot of talks about the 200 day moving average. Have we broken that . Have we not . If you look at the dynamic in the technical picture of the market, the stock market has done nothing but flatten out which allowed the longer term moving averages to play catch up. Although if you look at whats happening in the emerging markets and china its hard to imagine if you add up all of these economies its probably about half the Global Economy. Sure, absolutely. If its getting sick its hard to imagine that its not contagious to us and europe. I agree. Take a look at the action overnight. This is a key tell. We had asia down another 2 or 3 . Maybe more than that. We were down significantly. We just touched positive overnight but when you dont get the follow through on the third day of harsh selling. Its early in the day. If we close down at the end of today, if things get uglier do you change your mind on all of this . Im reluctant. I dont think much has changed. Asia has been selling off quite significantly. I dont think the fed is in position to hike and what really has changed . I dont think much has changed in the picture. And what would change your mind on that front . Im sorry to keep coming at this but theres a lot of nervousness. Theres people that are very worried. I understand and we go through this every single time. Just to put in perspective again since the european low, the credit crisis low in 2011 the stock market i believe on average has declined about 8. 5 over six different declines. Right now were at about a 4. 5 decline. We have another 4 to 5 to go even before we get to an average pull back in this up trend. So another 5 and then a little more than that and then we can talk. I want to chime in because one of the fears i hear out there is okay china is going to settle down somehow into a lower growth rate. Nobody quite understands how china unwinds. Which is who has what debt, what leverage. We have never been through this. We have been mostly living in an era of double digit chinese growthment we have gotten to a point where its 7 . If this goes down further who gets caught holding the bag . And this is classic and i say that only in the last 8 years, classic post financial crisis uncertainty where everybody wonders where the r tare the bo buri buried . Great way to put it. Jeff i dont know how much of that conversation you just caught but people are very nervous at this point. It does feel like investors are less likely to jump in and every time that theres a pull back and prop things up. What do you think happens next . Yeah ive been speaking to Portfolio Managers and i havent seen this much fear since the spring of 2009 and were only 4. 5 off of the high, the cnn fear index is at about its most negative reading since 2012. The New York Stock Exchange is about as oversold as it ever gets. A number of finger tore wallet ratios i look at are as oversold as they ever get. Our timing models call for a low between august 13th and august 18th with a plus or minus three day margin of error. Thats like today. So today, at least to me, feels like ka pitcapitulation. Meaning you think we are nearing the bottom. Absolutely. Yesterday it was pretty ugly. Youd look for a bottom today or the first part of next week. What makes you so confident in that. Because ive been in this business 45 years and ive seen this act before. Its like pornography, you know it when you see it. Can you tell us what goes into the model tell us about the model that gets you to this very specific period of days. The modelsareproprietary. Its like flying a private plane, you have to trust your instruments and the instruments have served me pretty well over the past 45 years. Whats going into those instruments. Im not going to tell you because theyre proprietary. Yeah but its hard to come on the air and tell everybody about a specific week you think is going to be the all time low. Its a good record. But i think that it would be i think the audience would be a great beneficiary just to at least understand the kind of me tricks with which youre using to come to this conclusion. And i say it again it is proprietary and if you tell people how you do your models then the models become worthless so im not sharing that. I give you kudos for coming on and saying this and pinning yourself to a date like that. Youre the only person i know that will say it that specifically and obviously well be able to check it in the next week or two weeks. So i give you kudos for that. What are you telling your clients in terms of what to do right now . Are you saying buy american . Buy u. S. Stocks with both hands . Or are you more specific than that . I am more specific than that. America is still the best place to be. Theres head winds in the emerging and frontier markets. Jurors looks cheaper than the u. S. But theres issues over there so we think stocks like fundamental analyst of mine has a strong buy rating on a stock like the low orbiting satellites that basically cratered because of the spacex explosion that pushed their launch out. They have come down to 270 a share that has a 6. 3 yield and as they get their launch schedule back the cash flow is going to ramp and pretty soon theyre going to have a 50 Free Cash Flow yield on their common shares. So we have been using a rifle approach on special situations. All right. Jeff, i want to thank you very much for joining us today. Todd thank you for coming in. Its good to see both of you. My pleasure, thanks. Lets turn the conversation to oil and currency with crude oil hanging near six year lows. John, we know your special model has Something Like a three handle on oil. You said were going to get there. I do. We have to leave ourselves open for an upper 20s low point because of how fast this whole thing is unraveling for the oil trade. Not only is it a supply story but this china situation to me is very disturbing. Its the key demand center for oil and were not going to have the kind of growth that we experienced over the years. It got built out over the years to see the demand for everything. Iron ore, crude oil, not only have they met it but now the demand wont be there to the extent that the industry thought it would be and thats what were seeing the experience here. All of this has a feel of deja vu all over again. You and i went through the bottoming out of oil in 1998 and what was interesting to me is the first pass of Lower Oil Prices was not enough to shake it out. Right. It needed another pass and another pass and only when it hit rock bottom did it create the balance needed in the market for supply and demand. So this could get ugly. Could you go you did. Youre great. Theres that and a low, slow climb up. That was a ten year supplydemand balance. So whats your take about how low it can go now . Like i said, i think we can at least go into the mid 20s but you have to be open for this thing to get real ugly. Mid 20s you changed your mind from a week ago. Its lower. What changed your mind . The china situation. Some of the data is worsening. I think the govern. S reaction means its a much worse situation than is being talked about and also the bad print on gdp from japan last week also is telling me that the whole center out there is a problem. If thats the case its a reflection on oil and the stock mashl market. That would make it seem its a volu valid mark in the stock market. Very much so. China is a huge problem for the Global Economy and thats why the stock market is reacting the way it is. Lets pivot to another thing. Im going to take the opposite side and stay our lows are still in front of us on the equity side. That we have not seen the lows yet. You think theres Something Real happening. I think the whole story is that the market is thinking is this as good as it gets . We threw everything but the kitchen sink at the economy and we did 2 and now everybody is flat lining and starting to go the other way and maybe thats why. How low is low . I think, you know, we could have at least on a 5 to the down side. Total of a 10 correction . Yeah. And then the crisis scenario and one thats an outlier is if something goes wrong in china, thats tun known. One thing for the market to decline and thats a bad thing but different from Systemic Risk and another is the 97 Asian Financial crisis. Anyway, does any of this smell or feel like that kind of crisis to you boris . Partially but not all the way. You have the same element which is is concentrated capital, huge amount of corruption, lots of mal investment. All the best hit of what happens with asia capitalism. One thing thats different now is all the economies are better buffered against it because they have better reserved so i think they can be presented in some ways. I dont think its nearly as big of a problem as in 97. Explain to me, amid all of this, i was looking yesterday its weakening against the dollar, all of those asian current s currenci currencies, why is the dollar strengthening against the euro. I think it could get squeezed out to 115 because everybody was short the euro. They have been able to pass identify greece and this is making the euro more attractive. You were at 60 in terms of fed raising in september. I would have agreed with you then. Im back pedaling at this point. I think its much riskier for them to do this in september when they were nervous about july and nothing but bad news has come since then. I think thats right but i basically shut my market down. Were having an imbalance in the trade in my brain right now and what i know is going to happen is im going out to jackson hole and im going to get a chance to talk to these guys. Why speak before i have better information. Im going to say 35 to 40 . But look i thought 60 when i heard what they said. The Economic Data in the u. S. Has been better. We think were going to print a 33 or a 34 in the second quarter. We might do 2. 5 in the third quarter. They are better numbers than expected. So the third scenario is the one and done where they do it just to basically say were in control of the market. Is that victory if its one and done. Its a puny victory. Oh we raised when we really should have been. Or the boj same kind of a story. What theyre hoping for is its one and done and six or seven moss down the road it gets better and they can resume Monetary Policy. Theyll say rates will stay unnaturally low for infinity. So that could be a scenario that nobody is anticipating yet and i dont think the market will react that positively because the forward guidance. I want to give you the headlines of this conversation. From the 30s on oil down to the 20s and a 115 handle on the euro before anything happens. And hes taking the other side of this equities are going lower. Jeff said the bottom could be today. Its supposed to be over today. In terms of august surprises too you have north korea and south korea exchanging gunfire on their border yet. Forgot about that. That would be a big negative for crude oil because another asian Economic Center would be thrown into turmoil in a big way. But theres a potential hurricane heading toward the gulf. What happens if you buy now relative to october. If we dont have a Systemic Risk. If we take the scenario out of it its a great time to average into a position because generally we have been up. As long as its a 208 scenario. Thats been the history for now. So you can be both short and long and be right. The beauty of the markets. You have to look at all of these things and be asking yourself is it a buying opportunity . And guy station market was expensive have to look at 16,900 on the dow and say maybe theres a chance to get in here. Thanks guys. Maybe its as good as it gets. Worked for the equity guys. It has. Coming up we have stocks to watch. Among the names on the move this morning, hewlettpackard under pressure. Before we head to break well take a look back at this date in history. Welcome back. We have stocks to watch this morning. The futures are lower after all the news we saw yesterday and the drop in the dow. Check out hewlettpackard. Revenue dropped for the 4th straight quarter. Also hps Current Quarter and guidance falls short. Well be talking to a tech analyst in the next hours. Shares getting a boost after earnings and revenue topped expectation and that stock is up by over 6 and posting a smaller than expected loss. Revenue fell short and the Company Announced plans to divest quicken and two other units. That stock down by over 10 . Fed exwill formally launch and it talked about making this offer before but there is a formal launch of the 4. 8 billion for dutch rival tnt express. Thats going to come next week probably on monday. Its optimistic the deal will get the necessary regulatory approval. You might remember that tnt is the same company that ups tried to buy back in 2013 only to be blocked by regulators. Theres a number actually theyre not a number of Delivery Companies in europe. All youre talking about is dhl, tnt, fed ex, and ups. Why is this one good now . That will be the question. Theres an argument to be made that given the market power of dhl and ups in europe that it could create a better competitor to those two others. That would be the argument so we will see what they have to say. Its possible to allow the deal to go through. Theres certain market where is they actually own too much of the business. But we will see. Well turn to politics. John harwood joins us from New Hampshire where president ial candidates are pounding the pavement. Good morning to you jon. Good morning, andrew. We have an escalating immigration debate on the republican side that involved donald trump, jeb bush and the entire range of candidates. I sat down yesterday in detroit with marco rubio and asked him whether or not he was concerned given the republican parties interest in repairing poor relations with the constituentcy whether or not he saw a need for this debate to be toned down. Heres what he said. When i talk about 13 Million People in this country illegal i say 13 million human beings. Anchor babies. Well these are 13 million those are human beings and ultimately theyre people. Theyre not just statistics. Theyre human being with stories. After the last president ial election your party did an autopsy and said number one priority is to repair the breach with latino voters. As you sit here in a campaign thats got a descent shot to win arent you thinking that right now the Republican Party is dropping a giant homemade bomb on itself and its chances in 2016. But its not the Republican Party. These are individual candidates responsible for their own rhetoric. But thats the face of the Republican Party to