Today's Market
by Dr Invest

Get ready for a wild ride because the Asian markets are down nearly 3%. This doesn't bade well for the U.S. market when it opens tomorrow. The likely culprits are the elections in France and Greece. Political forces have gathered against the Euro-stimulus program and the people of France and Greece are declaring "like hell we are gonna continue the austerity programs".

Both presidents have made promises to discontinue the austerity program and fund government and the unemployed with money gleaned from the rich. The new socialist French president is suggesting a 70% tax on the rich to keep the government workers and fund programs for the unemployed.

Greece is likely to go bankrupt and whether Greece is kicked-out of the Eurotribe or remains as part of the Euroeconomy, they will affect the Euro. What is already bad in Europe, will not be worse. Much of our trade, which is with Europe, will now be decimated and a further slowdown in our own economy is predicted.

How soon will this occur? It seems that the Asian market is already responding and we will see how the U.S. market responds tomorrow. I still see broad swings in the U.S. indexes and expect that the U.S. market could become paniced quite quickly.

I would think that Bernanke and company could let this year's profits burn-off before considering a new QE-3. That means a 12% drop. I think that it is more likely that Bernanke will let the market fall 20 to 30% before directing a QE-3 or he may be reluctant to do any easing in an election year. The object is to see an orderly recovery in the market, but if the world markets were percieved as 'so bleak that a world-wide recession was unavoidable' I think Benanke would do nothing. In this case, without the support of FRANCE, I think GERMANY would be reluctant to do QE on their own.

If you have your STOP-SELL in place, these downturns should not affect you much. I recently purchased BOND EFTs and expect them to rise in value. At times, BOND EFTs can also fall if the market collapses. This is all the more reason to put a STOP-SELL on your bond ETFs.

Tomorrow could be a "bad day" for stocks. I don't own stocks right now, but if I did I would move my Stop-Sell to 3% below the closing price. If I just purchased stock, I would consider selling before risking an immediate decline.

(note: the above article is for entertainment purposes only and not to be used as investment advice.)