Bloodiest Of Days Coming...

have a feeling we may see the bloodiest of days on the nasdaq, dow, and s&p very soon.  todays action following the FEDs 50bp cut in both the fed funds and discount rate gave us a huge tell that there are NO buyers in the market, just a few shorts covering, and the short covering was nothing to write home about.  at this point after several failed bounces, increasing concerns over bond insurers, and the market realization that FED monetary policy isn't the silver bullet to cure our problems we are possibly nearing a day where everyone just wants out of the market all together....in other words true capitulation. there is simply no reason to put a bid under the market right now. why? because there are no other buyers out there.  we saw it today. the risk associated with holding stocks overnight far outweighs any possible reward.  hence no bids in stocks, increased short selling, and increased liquidation of long positions. with regard to long positions, it is still going to take some time to unwind those long positions as funds across the globe were buying US stocks on dips just a few months ago...hence it will take some time for global funds to adjust risk levels appropriately in line with weak or negative US growth.

therefore, watch for the VIX to take out that ~37 high on a -600-800 point DOW, -125-150 NAZ tank sometime in the next few weeks.