Yesterday's Post

Premonition? The World is Officially Falling Apart

First, my prayers go out to the people of Japan.

Now, this is why I say, "have your toes wet in shorts", you just can't predict world events and the ones that will trigger more downside. As of the close yesterday, it looked like we'd see at least early strength this a.m. and the after hours market seemed to confirm it as it traded up. Overnight everything changed.

The interesting news is that the market is finally reacting to world events which is a major change in character, it didn't rect to Tunisia or Egypt. It barely reacted to Libya, it's reacting now.

The spreads on CDS in Europe are hitting all time highs, and why? Because Japan has been one of the two Asian countries buying their bonds, I'm pretty sure that they won't be anytime soon as all of their budget is going to go into rebuilding Japan, so the butterfly effect is going to hit Europe hard and at a time when Spain, the straw that will break the camel's back, is teetering on the brink.

My macro view has been consistently bearish, the Fed has been the only thing holding this market up, but something has changed there, either it's coming to an end, which Pimco seems to hint at, or it's just not being discounted by traders anymore as they start to unwind leverage with no QE3 on the horizon. One thing seems for sure, we are seeing a reversal in the market. Whether we see a Crazy Ivan in the days ahead or we don't, we are seeing a reversal. Don't get caught missing this move.

Don't panic either, you have time!