September Is Here - Markets Weak

We had more fraudulent ISM Manufacturing and Housing Data out at 10am this morning. Housing was again better qtr to qtr and year over year. Sales were weak in the Northeast, but much stronger in horrible Western US Markets, where there is more foreclosure and short sale activity. Most of the ISM overage was from inventory rebuilding.

My last post I noted that the SP was diverging with most global indices which were headed down.

The surge in stock futures at 10am looked to me like the classic: "Lets all kill the shorts to get a massive blow off top"

The markets quickly reversed and we have some serious selling in the futures.

The E-Mini Futures should find some support at 1000 or at the "G" Anyone who thinks the market is going to hell at this moment is putting the horse in front of the carriage. The bulls have not given up yet because there is so much to give up. The buyers will come in here pretty soon I am thinking, if not we got problems.



Same Here In Cash SPX Land



Crude Oil has become a proxy for the global economy. It has broken again below 70. It started out quite strong after 10am, but along with stock index futures have gotten weak all through out the morning. Crude still looks OK technically, so any selling could be met with measured buyers at lower prices.

Just watch Crude Oil, if it dips to the low 60's, you will see the DOW break towards 9K. If Crude can reverse course and rise into the mid 70's - 80's area, then DOW 10K ahead of payroll data is a possibility.

This is how leveraged and volatile the market has become. Its become all about Crude and Energy. The banks will kill us eventually but not until 2010 I am thinking.



Every one was looking for a down draft ahead of September and that is what Mr. Market is giving us. This is exactly how markets tend to behave at tops and or bottoms. Massive intraday reversals are the first indicator of trouble. We started out in the red, broke much higher into the green ,then broke down badly. The market does what it does best. Play investors for fools. The shorts all got blistered out at the top, and the last few buyers who were on the sidelines hit the buy button right on time for the market to reverse.