Weekend Commentary

I don’t normally put out a commentary during the week but this one needs one.

The break on Tuesday was in our opinion terminal. Still before we really go off the cliff an incredible short squeeze could develop that takes us back to the highs. That could start at any time. The other scenario which is much more bearish is that this is merely the start of bigger collapse that culminates in a stock market crash later this month. So don’t be a hero chasing anything even if we start a short squeeze unless you are a trader. Golds and oils we suspect will also get hit hard in any initial drop here but ultimately they will recover and outperform. But in this intial phase everything should get hit. This morning we are getting another big down opening. Again don’t be cute thinking this is bargain bin time it will become more a of a bargain later. I have short term on the S&P at 1360. But if that breaks as well it will get really ugly. On the upside only above 1430 right now would tell me a short squeeze may be underway.

The Chinese market is a mess despite everyone rushing back in and it is going to crash big. The scenario I described in last week’s Scoop is coming to pass with only the war in the Mid East to erupt to complete the circle.