This is your stock market: -588 points. This is your stock market on heroin, +601 Dow futures.

Like the Opium Wars of the middle 1800’s, China is supplying the needed dose by cutting its benchmark interest rates and lowering banks’ reserve requirement ratio in order to provide additional borrowing to a debt leveraged economy after stocks fell again Tuesday.

China’ Shanghai Composite fell an additional 7.6% overnight with Japan’s Nikkei dropping 4%.

Admittedly, nothing has changed in the global economy overnight to warrant such a bounce back move in US equities, but a manic-depressive stock market is bound to have these swings.

I figure this will be the last central bank intervention before the Fed is to meet in mid-September to announce no rate hike this go around. That is unless we want to undo what China did overnight, which is a possibility in this Currency War.

I have said the US can’t afford a rate hike and that is true, but payback is something different. We’ll see.