The slide in the Nikkei just goes to show how deeply overbought these markets are. Players have been caught up in the euphoria. Now it's time to face reality. |
The U.S. (market) is still stuck in a rut. We are calling the Dow up on the day, but so far every rally in the pre-market this week has been met with selling once the regular trading session got under way, |
There is no doubt that the recent rally is fueled by a lot of short covering from bears thinking the New Orleans debacle would cause jitters on Wall Street. |
They may even ease rates because of Katrina. |
Valuations are very high for the current economic climate or indeed even a prosperous climate. So it looks like what we are dealing with here is a bear market rally. |
We are obviously expecting to a see a sea of red this morning. The selling has been relentless through the night and currently the Dow is being called down about 100 points. |
We could see a little bit of a relief bounce if the (economic) numbers are good. Also, today and Monday are the last days of the month, so it wouldn't surprise me if some funds throw a little bit of money at the market to boost some key names ahead of the 31st of October. |