5/06/2010

Eeeeek 1,000 points?

Once again program trading is at the root of the huge drop. There were no specialists on the floor to intervene on the panic selling so the market went nuts. But the main thing to watch for tomorrow morning (aside Asia) is the parliament vote in Germany. If the Germans tell the Greeks to go fuck themselves Europe is destroyed; I don't think they will deny the Greeks a lifeline even though there is no way Greece can repay the "loan." This means that the bailout will hang over all markets for quite a while. Make no mistake, this is a body blow to the EU and the Euro. The dollar will be the reserve currency for awhile but gold is where a hell of a lot of people and countries want to be. We are in a bear market so tread softly. Fear is king right now. Consensus is for a big correction which means 8800 Dow before this is over. People are beginning to realize how important Europe is in the world economy and that the EU will never be the same again.