food4: The MENA (Middle East/North Africa) continuing crisis should have been the 'trigger' for a significant sell off but the Plunge Protectors of Bernanke's manipulation cabal held it off with their futures buys which triggered the HFT 'buy' programs, which is why we saw every early sell off get fully or partially reversed over the preceeding several weeks. Now the Japanese situation has finally provided the straw that breaks the camel's back so to speak. But I no longer underestimate the Fed's willingness or capacity to manipulate the markets. They invoked Rule 48 this morning in order to supress some of the early volatility. POMO starts back up and there is the FOMC meeting, so we could see a rally later today. But unless Bernanke announces an accelerated POMO schedule or hints at a massive QEIII I think we've seen the S&P high at 1344 and the Dow at 12,418. We've broken support to the downside which is significant. A look at all the markets around the world clearly indicates that risk is losing its appeal. Precious metals are down, commodities are down, stocks are down significantly, oil is down....the only thing rallying seems to be US Treasuries and the Dollar. Exactly what happened in the fall of 2008. At that time the last market rising was oil. Same thing this year. The emerging markets had started their bear markets in November 2010. Other markets are following sequentially. It will be more difficult to play because we won't go down in a straight line due to Fed liquidity and market tendencies. No two bear markets act alike, especially back to back. Whereas the 2008 crash was swift and steep, this one is likely to protracted and gradual with many false upward rallies to keep the frogs in the pot. Investors are prepared for another tsunami sell off but they won't be prepared for a '2 steps down one step up' gradual descent to where we're going, which is sub 500 on the S&P by the end of 2012. (Interstingly, since I began this post they've managed to pare the losses already with the Dow now down only 200 points. You have to hand it to the PPT, they do their job well.)
AI
