october 6 signs of historical crash times, page-81

My comments from 18Sep08:
...........
"I had been waiting for 4 events to unfold (arguably, in line with the capitulation theory):
1)
oil to drop to $90...;
2)
The DOW to drop to 10000, but could well overshoot to 9500...;
3)
the NASDAQ to drop below 2000, but could well overshoot to 1800....;
4)
the ASX, to close below 4000....
................
Much of the work tracking back to the New Deal has now reached its maturity, with a new set of structures now emerging for taking the economy and global finance forward".

.............
Currently, the markets are tracking the following:
1)
NYMEX is currently @$90.20 (down 3.68%)
2)
the DOW is @10325 with the Futures pointing down 191 to 10173 (suggesting a 10150 opening)
3)
the NASDAQ COMPOSITE INDEX is @1947 with the futures down 2.5%, pointing to a sub-1900 opening
4)
the ASX is @4540, down 3.3% for the day; and
5)
the AUD is @74.36.

Tonight, the EURO is down heavily, and across Europe, the markets are broadly down 5.5%+, and gold is down to $828.

The really sharp message out of all this is the speed at which the AUD has fallen (from near parity in July to near 74, now). That fall has been very hard indeed and has caught most commentators by surprise.

The AUD, however, has become a de facto proxy of the commodities market, with most commodities well and truly off their 52 week highs over the past 4-6 weeks. So much so that the question is whether the AUD will drop back into the upper 60 range sometime over the next 48 hours (notwithstanding the very heavy RBA action that will be taken tomorrow, with a 50bp+ cut on the cards).

It could well be that the RBA breaks with tradition tomorrow and moves by something other than a traditional cut (ie: in quarters). If the growing view is that the banks will keep some of the rate cut, and the momentum is on to cut rates decisively, then the RBA could well cut rates by 60bp (with 40bp passed through, and 20bp retained by the banks).

Time will tell but tonight's Wall Street action will signal widely how tomorrow's moods will shapen up given that Europe has generally been years behind in economic, industrial, social and protectionist reforms compared to the USA and elsewhere. However, it is Europe which is playing catch-up and which is kneejerk reacting to an even greater, and more inconsistent extent.

Australia still has a rocky path to traverse, particularly in the foreign currency setting.