It's Bad, but It's Not Over

With the little bit of a rally going, maybe we should contemplate the big kahuna. After all, oil's decline at the same time as the transports' decline has put the depression camp's idea back on the table. Gold has solidified this point of view, as the Weimar Republic camp (wheelbarrow full of greenbacks) coalesces with the chaos camp.

I have said I think that oil holds the $30s. I find it hard to accept, given the massive decline in exploration and production, that we can't balance and offset declining demand here. But let's face it, these are the two twins that, along with the banking and auto collapse, are causing people to say "it's all over," and "that's it," and "we are done for." It is time to ask, is the fat lady singing?

It is incredible how many pressure points are being revealed all at once. It is like the disaster manual is being broken open, and the floodgates are finally opening, as the bears have insisted they would. These are the people who have long felt not that the market should go to 6000 but that it should disappear entirely! So perhaps it is truly worth exploring what it means to be all over, given that it is hard to imagine that there could be more things going wrong at once.

Could there be more of a shooting-match moment? Could there be a more threatening moment to all sectors except gold? I don't think so. I can understand that even though we are down some 6,000 Dow points from the high, it may just be a stopping point, a brief pause, for a much lower level. I am not oblivious to it. The "feeling" and the data are precisely what caused me to say some 3,500 points ago that you should put 20% of your holdings in cash, and to say 2,500 points ago that if you need money for a major purchase for the next five years, the stock market is no place for it.

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