Equities This Hour

Markets rarely go straight down. Though the Nikkei is right now opening the week down 500, the Shanghai Index is down 200 and the Hang Seng down almost 1200 points, the S&P futures are down only about 6 points. If I had to guess, I would say that in the absence of additional negative specific information, the Spoo will rebound starting tomorrow toward 1500 before resuming the downtrend. Prognostications like this of course tend to make one look like an idiot, but that is my guess at this hour. There is a lot of scheduled data coming out: wholesale and consumer price indices, resale tales, NY and Philly Fed Indexes, TIC data, Industrial Production and Capacity Utilization, and the federal budget statement. Add to that the normal weekly petrol inventory data on Wednesday and whatever Fed speeches and unscheduled balance sheet revelations might be released by banks and other financial institutions here and there and it should be an interesting week. Note that the Spoo is still technically in an uptrend looking at the daily scale, and the low to beat to break that is way down at 1370, the August panic low. Fundamentally, are the companies that make up the index not worth what they were at the peak in 2000 at 1553? Imagine how much wealth has been created in the world since then. Staggering amounts. Much of that has unfortunately been created in locales outside the United States. But the wealth created is there nonetheless. It is this huge pool of wealth looking to be put to work that is the one real problem for a bear scenario.

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