Good morning,

It will be a difficult morning for equity traders. Wall Street fell off a cliff Friday night. The Asian session predictably fell Sunday night, but not by as much as had been feared. In the meantime the Dow has put in a spectacular recovery rally, and is now being called up 75 points. The Euro and the Sterling rates against the Dollar are pointing to Dollar weakness, which correlation wise often means stock index strength, so at this juncture in the morning it is anyone’s guess how bad the open will be for stocks.

If we go by the falls in Asia, which have already fallen heavily over the last week, then the falls should be contained to within 1% or less. Right now the DAX is being called down almost 1.5% by us.

 So far my prediction for a 10% correction is well under way, and I am not surprised by the 5% fall last week. I still think we will see lower prices in the first quarter of 2010.