t4pForgive me for interrupting your discussion with martis, but...

t4p

Forgive me for interrupting your discussion with martis, but I would like to add my input.
Firstly let me state I am not a chartist, I think they can be useful at times in "normal markets" to predict short term entry/exit points but are mostly useless in times of market stress.
The "sub-prime fiasco" is very serious - I expect to see the contagion move into other levels of supposedly higher rated debt, I say "supposedly" because who would give much credibility to the ratings agencies given their recent woeful history.
The simple fact and major problem is that current world markets are engorged with debt !
Whether it be share margin investing, borrowing on home equity or leveraged hedge funds, we are witnessing a generation of investors who believe asset growth will always outstrip debt repayments, and that if there are any bumps along the road the Fed/RBA will save them.....sometime soon I suspect they will learn a tough lesson.
The difference with previous "market crash" scenarios is that this time it is the shareholder who is leveraged rather than the company itself, and it creates a situation where huge amounts of shares are held in very weak hands.
The markets these days are predomintly run by brokers and fund managers who have never experienced a downturn, they have had an ingrained "buy the dip" mentality which has always worked (well in the last decade or so anyway). If they get it wrong they will lose their jobs, if investors here get it wrong they may lose their homes - there is a difference.
These screen jockeys must have felt placated by the Fed' words, and the RBA's "strong economy" talk and felt it justifiable to push our market up 100 points on the day interest rates hit a ten year high, I think this is insane, and I would also ask - what do you expect the Fed/RBA to say ? things are sh1t? of course not, they are in the business of promoting confidence.
With regard to your comments on a weaker USD, I can see them using this as a cheaper way of bailing out the trillions of USD denominated debt they have got themselves into, the problem once again is the leveraged instos who have borrowed Yen in the carry trade to invest in global shares, if the USD falls they are cleaned up.
I am not trying to make a comment on valuations, I think they are ok but not cheap, the risk in the markets is both a deterioration of the US economy as the credit issue grows, and the weak hands in which billions of $ of shares are held.