absolutely relentless, page-27

I'm not sure there will be a lot of short selling from these levels.

Trading on the DOW last night demonstrates that the market thinks this might well be the bottom but is unsure.

Going short is probably higher risk than going long at the moment.

IMO the bottom in the US is pretty close. Small caps are well below fair value - some by a factor of 5-10 (see CVN, SEA, INP) and many are trading well below CASH backing (eg BRM - cash backing 90cps, SP 70c).

The problem at the moment is that most of the sellers are not voluntarily selling - hence are forced to sell far below value - either margin calls in the case of small fish, or inability to roll over debt/liquidity crises in the cases of the big fish. I wonder how much of Lehman's massive equity and commodity holdings are being liquidated - that could crash both markets for weeks alone. In addition there are large numbers of hedge funds either illiquid or on the cusp that are liquidating assets - and MASSIVE Japanese selling of the aussie dollar post the fall in commodities, which is the main cause for the aussie dollar to have crashed to ridiculous levels (much more than a relative drop of 0.5% vs trading partners would dictate) - when we have a TRADE SURPLUS.

The good thing for the dollar is that it will bounce hard once selling is finished - unfortunately I'm already 100% in the aussie dollar already.