“Just Another Manic Monday” (Bangles) …or Not

Reaction early this morning to S&P lowering of the US credit rating showed Asian and European stocks lower by ~2%, but not a route. A good part of the market damage was done last week. Some blamed the messenger but most agreed a downgrade was possible. It changed nothing about the increasing US debt. Gold climbed over $1700 last night to a record. S&P will hold a conference call at 7:45 CDT today to explain their action, I’m listening in if they let me.  I spent most of last night listening to the talking heads on TV. One of my three business channels went back to their regular nightly programming of infomercials, which was reassuring to me. I spent some of the evening contemplating what the "experts" trading positions might be. Some like Jim Rogers were very upfront (long gold and commodities, short stocks but covering this week), while others took some thought. Lucky for me the first half of the Yankees / Red Sox game was uneventful.

I think the VIX will be very interesting this week. VIX is double where it was a month ago (15.25 to Friday’s 32.00 close). It set a yearly high when it hit 39.25 Friday morning. Will stocks put in a bottom today? I’m guessing no, but if the market senses the bottoming process has begun, will we see the VIX trend lower? 

Marty Kearney