Well, looks like the next catalyst down might be the US Super Committee's failure to get a deal done. Today, the Dow sold off over 340 points but then rallied to close down 249 to 11547. There was a rumor from Max Baucus that the Super Committee still has a few hours before announcing that a deal is dead. Not holding my breath, but you never know. The S&P closed down 23 to 1193. We have now closed below 1209 and await the Super Committee's results. A break below S&P 1185 on Super Committee's news would be very negative.
Over the weekend, Spain voted a change in government. Mariano Rajoy is now Spain's new PM. With a 23% unemployment rate, this news doesn't change much of the reality of lack of growth to get out of debt.
There were also fatal clashes in Egypt. The Egyptian cabinet resigned Monday night.
Uncertainty x Uncertainty = Uncertainty ^2. Not a good situation for investors. One bit of "positive" news was that the VIX didn't rise that much today as one might expect (up 2.84% to 32.91), so we'll have to see if we break down from here there's a bit more upside before we crash. A global sell-off, broad-based similar to today, will take down just about everything but cash and shorts. Stocks can fall much faster than they rise, so there could be an excellent opportunity to make some money here if you're short or want to average in on the way down.
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