My Diary 447 --- Market Pieces for the Past 24 hours

Market Pieces for the Past 24 hours

S&P        909.92    -7.6%        Financials and autos led the charge.

VIX         63.92     6.39        Another new high -- staggering.

TED spread 423.23    31.78        Out another 30-odd basis points.

Crude       84.91    -3.49        Key support at 80-85 still holding.

BDIY      2503       -9.4%        Not updated on BBG

LMEX      2664        2.1%        Targeting 2,000 or lower.

Copper     242.4      2.4%        Back above support at 240

US$ index   81.16     0.0%        Very strong resistance in this region

US 10y       3.78    +12bps       Supply concerns dominating.

US 0-2 yc    0.03     -4bps       Signaling further rate cust still needed.

 

At 70-80 points a day, the good news is that this bear market will be over in less than two weeks because the S&P will be at zero. On the daily basis, the index made 287 fresh lows in yesterday's session after 290 on Monday. In the 01-02 bear market, the biggest number of new lows was about 90, so we are way off the scale.

In the last three sessions, the smart money index (which compares the last half hour of trade with the first half hour of trade) has completely collapsed and is now at a level consistent with US recession for the first time.

Based on last night's inventory data, Q3 US GDP will be positive but Q4 GDP now looks like being UITE (ugly in the extreme).

The Chinese rate cut was more than fully expressed in the drop in SHIBOR (Shanghai inter-bank offer rate) rates.

For now, all traders need do is watch the LIBOR (up 23bps to 4.75% yesterday) and the Ted spread in the US (+32bps) to gauge the extent of likely deleveraging.

Equity markets will not turn until we start to see some relief in the money markets. Normal indicators of stock market bottoms are broken in this environment. This is a modern variant of a crash.

The 14,000ish target on the Hang Seng is looking easy to achieve. The Nikkei is moving to test the 2003 low at 7607 (there are no banks in the Nikkei).