Wall street monkeys in suits will be de-leveraging like no tomorrow. Biggest one day plummet coming up in the next few days. Buy JPY, short everything else, especially crude.
Hum....you mean this kind of stock ???? Source : http://bespokeinvest.typepad.com/bespoke/2008/01/lots-of-stocks.html
IMHO, NO SURPRISE RATE CUT. Massive Margin calls tomorrow if we punch through 11500. Capitulation if we punch through 11500. Down to 11000 by weeks end if we punch 11500. Bear Market confirmation with a trend reversal confirmation once we punch 11500. If we do not punch through 11500...look about above. Most global markets are close if not in Bear territory with 20% declines in the last week. The chips will fall as they may.
Look for clues on the overnight US dollar index move. So far it indicates little direction. If it begins to drop in the next few hours, then there will be a "surprise" cut.
I'm pretty much a novice when it comes to the markets, especially futures, but why exactly are the futures down over 500 points? There doesn't seem to be anything "new" out there per se, not important enough to sell off THIS much, is there? US economy is headed towards recession, is probably in the process right now, but I thought this was known for some time. I just recently learned about futures and so I don't know much about them historically, but what's the largest percentage drop you've seen in futures before the market opened? Personally, I'm caught long in Suntech Power (STP) because I tried to make a quick buck, except obviously the market turned against me quickly. I should have just taken the loss awhile ago, but of course that would have made too much sense. Seeing the futures down this much, I'm wondering just how severe the selling will be, and if I should just get out when extended hours trading opens tomorrow? I've never traded during extended hours (like I said, I'm a newb), but those futures aren't exactly encouraging!
The $ rise was perfectly rational. Carry trades fall in volatile times, dragging euro dollar and cable down. If world markets slump then the ECB will go from a tightening bias to rate cuts. That is a huge change. The US was always going to be cutting rates. Slightly less definite is the fact when there is blood on the streets investors tend to lock up profits in their 'winners' (ie short dollars) and also they tend to repatriate funds.
Lon Eagle: The unwinding of Yen Carry Trade should cause Yen to go up and US Dollar to go down. That is because to unwind the carry trade, people dump US dollar, buy Yen to pay back the low interest Yen loan. We see Yen appreciate against US dollar. But oddly US dollar index is also going up. That's illogical.