Ah….Freak Out…..

Posted on 08/08/2011


…..Le Freak! c’est chic


The S&Ps were DOWN 80. The financials are getting absolutely crushed. The DJIA is down 550 points. Crude is down $5. The VIX is nearly 47.

The rating agency that was passed out at the wheel while the housing market imploded has weighed in on US Treasuries and YIELD is LOWER on the day.

I said I would keep my eye on “Dr. Copper” as a good proxy for economic expectations and I tend to think it’s at a critical juncture (just below $4 a pound). In my rudimentary technical analysis, this was resistance in the 08 run up, it provided support earlier this year, and now it appears that the support has given way (and there is a LOT of room to the downside).

Be your own judge.

With an hour and a half to go until the Equities close (Energies just closed on lows), I expect to hear rumblings out of the hedge fund world about redemptions (which could exacerbate an already sensitive situation).

Short termers could take a shot at owning this market into the close. The Russell 2000 is now in “bear market” territory – 20% move off highs.

The silver lining in all this is ENERGY prices are significantly lower than they were just a few short weeks ago and that directly impacts consumers.

Copper however is know for it’s forward looking (leading indicator) qualities and this is what it “sees” –

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