Well, I guess we now know which side of the knife the market decided to fall off of. What do you say about a market that's weaker than anything other than the 1929-1932 period? Oh, sorry. It's actually weaker than that one also.

Does anyone now think I was crazy when I wrote that I had a target of 500 on the S&P? That number came, in part, from the chart below. Look at it carefully because it matters. I actually think we'll break below the lower trend line since we spent so much time above it. That means 500 is the minimum target for the S&P.

We've now moved into the area where people are about to give up on the stock market for good. It's a process that'll play out over time, not just happen in one fell swoop. As prices move lower they'll sell. All the Edward Jones brokers in the world won't be able to convince them otherwise. They'll kick themselves for not selling when their instincts told them to, but let their broker talk them out of it.
How many times have I heard that one.

Liquidation is back on. Assets prices of all kinds are going lower. It's deflation people. Although the money supply is going up it's being trumped by collapsing debt. It's money AND credit. Assets prices don't lie. Gold going up or showing relative strength to equities is not inflation. It's simply reflecting fear of the unknown. I know some of that fear is from people afraid of inflation. I get that. It doesn't mean they're right, especially when all you have to do is look around at the massive deflation taking place and the dollar getting stronger, which is what happens during deflation.

On another note, Tim and I didn't record an interview Friday as I was out of town on business. The food, the company and the surroundings were incredible. If you've never heard of Anna Maria Island in Fl. you don't know what you're missing.