GLOBAL WEALTH DESTRUCTION

Ok... I'm not going to go there in this blog....

But note today that the following markets are UP:
UP: GOLD, crude, silver, bonds, stocks, corn, EuroCurrency

And the following KEY MARKET is down: JapYen

These are interesting points to make.

OK: Back to VIX & PUT CALL

We have had a retest of the lows on the DIA, which took out the previous selloff low, but did not make a new low overall (although overnight markets did certainly break under that low).

So, this is a decent repeat of how the stock market bottomed in 1974, which is what I've been saying in other venues for some time. There was a more bullish pattern that said the low was already in place last week and that we were due to rally 10-15% very quickly, but this last roll over shut that down, especially when the YEN went on to breakout again and put pressure on the world financial system. The price of crude oil keeps going down (except today, it looks bottomy on the chart) and the trade that is most NOT TALKED ABOUT is the Long Crude / Short Yen trade that we can popularly call the TEXAS CRUDE HEDGE after the famous bull market crash of 1985 where crude dropped from $35 to $10 in a very short time and nearly wiped out the SouthWest of the US and our friends next door in Mexico. Long crude oil in the ground and long crude oil futures is famously called the "Texas Hedge" because it really isn't a hedge at all, obviously. It is a rampant speculation. It was a bubble back then and it is/was a bubble now. That bubble may have already popped and THAT is what will put in this market bottom. A BOTTOM IN CRUDE OIL WILL PUT A BOTTOM IN THE STOCK MARKET = YOU HEARD IT HERE - YES INDEED.

Buy crude oil - buy EuroCurrency - buy silver - buy gold - sell bonds - buy stocks - sell Yen. That is what we should all be doing right here, right now.

1:27PM Monday, October 27, 2008