Which way the markets, everyone is asking. There is a lot of bearishness out there after the failure of the 100+ Tuesday morning Dow joyride.
I would like to remind everyone that the market's don't need to crash. Systemic seizure could easily and simply close the markets for trading for an extended period while they sort things out. Now, tell me, what chart is reflecting that sort of outcome? And yes, such closure would likely result in massive losses when markets are reopened.
Is seizure likely to happen soon? My guess is that there is 10% chance. Seizure would not sit well for a Obama campaign.
Be prepared for the unexpected. Super rally on more QE? That could happen, though we sure didn't get any fresh QE news. Collapsing economies that spark global seizure? The Fed is prepped to do everything possible to stop it, but always expect the unexpected.
In the short term, the Italian bond auction is a matter of hours away. Expect indications of ECB buying, or buying from somewhere to save the day. This could spark a traditional oversold SPX rally. If the Italian bond auction results are poor, or the auction fails -- well you know what will happen.