World markets continued last week's sell off today as European markets fell over 7%, Asian markets over 5%, and NewYork finished down almost 4%. At its worst, New York was down 9% as the S&P dipped to 1001 intraday. This decisive break of 10,00 on the Dow is a stark confirmation of our forecast for today's action. Tomorrow may see a relief rally but this is definitely no time to go long. Look for another big sell off Thursday or Friday that puts markets closer to 9000. As a basic position, I would stay short until mid November at least.
Gold finally got a boost from this turmoil and closed at $866. I think there may be intermittent rallies to $900 but long positions should be handled with care as gold will decline precipitously very soon. Gold over $900 might be a good short term shorting opportunity.
As predicted, oil continued its downward trend and closed down $7 to $86. My forecast for $80-85 is now looking overly conservative. There is a lot of downside potential to crude over the next few weeks and so I would stay short.
The Euro also continued to move down as it closed at 1.3511. I had thought the bear market in the Euro would take a bit of a breather this week. Let's see how the rest of the week plays out. I would stay basically short on the Euro over the next 60-90 days at least.
