Hmmmm..... FOMC minutes released today, DOW sinks immediately.

It was down all day, but the FOMC pretty much sealed the deal. Rate cut? Not a snowball's chance in hell. Indeed, there might even be a rate increase coming.

Let's look at reality here a bit. People say "inflation is under control". Really? Price soda in the grocery store lately? Up 30% in one year. Why? Corn syrup. Made from corn, of course. What's corn used in? Ethanol. What else is it used for? Oh, feeding animals like... chickens!

Gasoline was up strongly on the futures markets today. Already over $3 in many places in the country, may reach $3.50 this summer - and that's without any hurricanes (sshhhhhh!) in the Gulf. One storm looks to go that direction and.......

The DOW and S&P rolled over a bit today. Is this the start of something big? Maybe.

Alcoa did not impress the street with it's earnings. Neither did RIMM this evening. The Nikkei, as I write this, is down 195 - 1.1%; Straits Times is down 1.13%, Taiwan is down 0.33%.

And its early.... quite early.

Does this spread and bleed us tomorrow too?

Maybe yes, maybe no. But as I've pointed out before, rally or no rally somewhere along the line, I believe the trendline is down. If you haven't protected your portfolio, you might want to do that tomorrow. Early.

I do not, by the way, expect a "crash" - an uncontrolled plunge. At least not at this point. But a grind downward is just as bad or, perhaps, worse - because you might do what people did when Lucent was at $100.

See, it was a buy at $120.
At $100, it was on sale.
At $90, it was even cheaper.
At $80, it'll be coming back soon.
At $60, let's double up so we get twice the pop.
At $40, I need a drink.
At $20, I need a whole bottle.
At $10, I need a gun. And one bullet. For me.
At $5, I finally throw in the towel, and sell that piece of crap.

Be careful out there.

BTW, as an aside, check out AHM. They got a hellish haircut a couple of days ago after warning and violated a couple of important technical levels. I expected it would show up on all the daytraders and short-side guys' screens last night. As expected, today they piled in and the morning chart looked like a porcupine's back. A candlestick chart "full of pins" is a warning of radical instability.

There was no disappointment on that account this afternoon!

I'm convinced that issue is headed for the ditch, but it'll go there via the path of much fun. If you're into the daytrading thing (that's not my bag) it might prove to be quite the opportunity.... at least for a little while.

Labels: Bear market, Crash initiated, DOW Down, market crash