The Market

• Everything is down hard; oil, gold, equities and even bonds are off a bit.
• It seems the correction I had forecast five days ago, and about 647 Dow points, may be at hand.  But portfolio managers may also use the next three trading days to paint their portfolios.  We have had a 23% upward move over the last thirteen sessions, a world record.
• The day is not over and we could still get some buying this afternoon.
• The 7-year treasury auction was a huge success, yesterday.  Compare that to the UK’s attempt to offer 40-year bonds earlier in the week. It failed to draw sufficient bids.  The huge decline in UK’s GDP numbers may be the culprit.
• Natural gas prices are down 70% since July.  But they had been creeping up as cold weather used available storage.  Yesterday’s injection (the amount of nat gas pumped into storage) numbers were high so prices fell.  I have been using Chesapeake (CHK) as my nat gas play. It is down a bit, pre-opening.
• The Federal Reserve balance sheet is expected to be in the range of $4 trillion by the end of the year.  In September is was $500 billion.  That should give one an idea of just how levered our system has, and will, become.
• Corporate profits are down a collective 55%, an astonishing number.
• In the early going it may be appropriate to trade some inverse ETF’s.

Sidebar

I picked up my cute, diminutive, third grader yesterday morning.  We were going to go over some reading material and do some math.  Sage began coughing as we headed for the library.  It was a deep croupy cough so I took her to the school nurse, Nurse Patti.  As Patti checked Sage for fever I asked if every school had a nurse.  Right now, yes, but I cannot say for how long.  There are cut-backs all over the school system.  What?  Are they taking nurses out of schools to save money?  Hard to believe.

Make it a great Friday!