I'm going to go over our Risk/Credit Models 1 more time

This is to show you how disconnected the market is from the risk basket, in plain English, it was a bogus bounce, it was also the bounce we had been looking for when the market was headed down, so don't let emotions cloud your original game plan.

Hopefully the extent of the dislocations give you some confidence in just how much downside the market has before it catches up to leading indicators like Credit.

 Commodities took a big drop this morning, this is because of the Euro's weakness or more appropriately the $USD's strength, of all the FX pairs out there, the Euro accounts for 50% of the dollar index, so commodities are taking a hit due to a stronger dollar.

 Here's the commodity long term dislocation, look at commodities making a new low on the chart, way dislocated and also note the S&P top (green) as I have said numerous times, tops are a process, not an event, but when they get to the break point, they can move down fast.

 High Yield is selling off with the markets-this is confirmation of the weakness in equities, this is the type of confirmation we DID NOT see on the bounce in equities.

 The Euro and S&P starting to trade in lock step again as they should, showing the recent bounce was bunk.

 And look at the previous dislocations and how fast the market can fall , the Euro is also making a new low, but a significant new low, equities are way overvalued from an HFT standpoint and they should be sold off hard to avoid excessive risk. There's quite a bit of downside before the S&P even is near confirmation.

 High Yield Corporates, as I mentioned yesterday are selling off in the US as well as the EU, the trade is now "Risk OFF".

 And the longer term dislocation...

Finally, financials, the main leg of the market right now and where the focus/fulcrum is have shown very poor momentum vs the market.

I hope this gives you an idea of how frothy the market really is