Ominous Thought

UPDATE 10:21am EST: I am looking at the tape and am frankly surprised by the continued lack of buying – all we get to see are token swings to sweep stops and engender trading. We did see some traces of bullishness overnight, but that was quickly remedied in the first thiry minutes of trading. If we don’t see buyers step in soon we might actually embark on a wave count similar to what I labeled in blue below:

As you can imagine, this would basically be tantamount to a impending capitulation and I would then have to revise the target for the bottom of (5) a lot further down (in the 500s possibly).

Again, I’m not saying that this will happen – but if we drop below 700 on the SPX today there is a distinct change that something like this may play out. The cards thus far remain to be stacked against the bulls.

I have nothing much to add at this point. In order for me to jump back in I need to see a major rally first as I never ever sell the tape on the way down. Actually, I’m going to start looking for short squeezed candidates – when the time comes I want to have at least five good ones to go.

UPDATE 10:37am EST: Remember a few months back when I offered a visualization how much $1 Trillion is? Well, let’s review that math real quick:

A 1-Dollar bill is .0043 inches thick. 1 million stacked dollar bills is .067 miles, less than a tenth of a mile. 1 trillion dollar bills would be the equivalent of eight and a half planet earths stacked on top of each other.

For our math challenged rats, let’s do this another way:

One thousand times one million = one billion (millard in Europe, but I don’t want to confuse you).
One thousand times one billion = one trillion
In other words. One million times one million = one trillion.

A one trillion dollar stack of 1-Dollar bills would be one million times higher than the million dollar stack -or- picture it this way: It would take one million stacks of one million dollar bills to equal one trillion dollars.

If the million dollar stack is indeed .067 miles high, then the trillion dollar stack would be 67,000 miles high, which is fairly near to one third the distance from the Earth to the moon.

Some of you might know that the total amount of CDS written amounts to roughly $600 trillion – yes, you read that correctly. Now, if a $1 trillion stack of 1-Dollar bills is 67,000 miles high, then a stack of $600 trillion 1-Dollar bills would reach a height of  40,2 million miles.

BTW, at its closest point in its orbit around the sun, Mars is only 35 million miles away from earth. So think about this for a second – if this was real money (which it isn’t), you basically you could stack 1-Dollar bills from your house all the way to Mars and would still have a load of cash left over. I think it’s safe to say that there is not enough paper and ink on the planet to even print the equivalent of $600 trillion in 100-Dollar bills.

So you tell me:

• How on earth (literally) could something like this be allowed to happen?
• Where were our regulatory agencies?
• Are they going to succeed in ‘fixing the problem’ by bailing out those companies with tax payer funds?
• Are we going to see 4000 on the Dow or less?
• Are you angry yet?

I rest my case.

UPDATE 11:06am EST: As you are probably aware – we are now below 700 on the SPX.

UPDATE 12:09pm EST: New poll – please vote!