With Asian Trading in the bag, we are now dangerously close to satisfying another one of my conditions for confirmation of shorting the market - China closing below the 50, taking out first level support (aka "China blows up.")

However, remember that China's market assaulted the 50 once before, and immediately bounced. So you can't call a one-day break valid - because historically, its not. If there is follow-through this evening, however, and we wake up tomorrow to find China down strongly yet again, I am going to get rather suspicious - especially if we take out my other two conditions today in the US markets.

Europe is all red as I write this (6:00 CT), while our futures look like a small bounce. But traders typically don't really get on the futures until an hour or so before the open, so that doesn't mean much right now.

And the worm can turn rather quickly on the street....

The bond market overseas didn't move much. That's likely to change this morning. The Yen sank 0.68 against the dollar, with all of the damage coming in the afternoon, at the same time the Nikkei took a turn south.

Bear is trying to coddle people again. Of course its bull****, but you won't hear that from the mainstream press. Fact is that the company stuck about 15% of their market capitalization into this "bailout", a huge amount by any stretch of the imagination. If the CDO market continues to implode, and there's plenty of reason to believe it will, that 15% - or more - may come directly off their stock price. Yippie Kayae if you're a long holder of BSC; this may prove to be the mother and father of all shorts if you've got an appetite for the risk.

And... no big merger news this morning that I can find. So much for "Merger Monday" eh?

We are certainly in for an interesting week....... watch the 10 again this morning; the bond market opens first.

More as warranted!