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We have not seen a 24 hour turn in global macro market prices like this since 2008.  No, this is not 2008.  This is 2011, but globally interconnected market risk remains very real.


Below we’ve outlined 15 key points that matter based on our screens this morning. 

  1. SP500 breaks the only line (other than the prior closing low) of immediate-term TRADE support (1181); not good
  2. VIX breaks out back above TRADE line resistance (34.61) and moves right back into a Bullish Formation
  3. US Financials, Basic Materials, Energy, and Industrials all move back into 2011 crash mode (down -20% from cycle peak)
  4. US Dollar confirms its Bullish Formation and picks up a big momentum line of support at 76.89; watch that line like a hawk
  5. EUR/USD remains in a Bearish Formation (bearish TRADE, TREND, and TAIL with TAIL line resistance = 1.39)
  6. DAX fails at TRADE line resistance of 5489, and has no support to prior closing lows
  7. CAC/IBEX/MIB indices look no different than the DAX – all in Crash Mode
  8. Russia down -5.4% and crashing (down -31% since April!)
  9. Hong Kong blasted for a -4.9% move and its now in crash move alongside the KOSPI
  10. Indonesia (one of the world’s best economies in 2011) down -8.9% on no news!
  11. CRB Commodities Index has broken its TAIL line of 333 and confirmed what Dr Copper and Oil prices see
  12. Copper down -5% in a straight line and it moves into crash mode for 2011 now too (down -21% since FEB)
  13. Oil confirms yesterdays TRADE line break; what was support is now resistance at $86.91
  14. Gold is now a source of funds; that’s $1821 TRADE line break that got me out, puts $1630 in play on the downside
  15. 10-year US Treasury yields blew through the stop sign making lower-lows at 1.80%; that’s just bad for a lot of reasons 

Bernanke couldn’t have fundamentally understood that a 1-day 21bps compression move (11%) in the Yield Spread would do this to both the Financials (net interest margins, cash earnings, stock prices, etc), the bond market, and Global Macro risk. He’ll start to get it now.


This is a serious risk day for serious people. We are not being alarmist. We weren’t in Q3 of 2008 either.




Keith McCullough

Chief Executive Officer