Shenandoah

Well, since the last couple of “three things to watch” were so popular, I’ll try to make this a daily feature along with a little commentary…

1. The dollar/yen price. So far in 24 hours we have watched fluctuations from 116 to just under 112 yen to the dollar. While those that do not understand the implications of this ignore it, it could well mean the Japanese will be unloading as many of the MBS and CDO’s that they purchased from our hedge funds and are repatriating a substantial amount of money back home in anticipation of a market shock coming down the road. One thing you have to remember is that their mindset, despite all the rhetoric one hears, is much more forward looking after their stock market crash and if they think our market is too unstable, they will protect their economy first and divert their resources to servicing the Chinese, Indian and Middle East markets while taking their lumps in our market. This is not what it seems and I refer back to the op-ed I wrote last week here on “American Irrelevancy” to try to give everyone a clue as to what the rest of the world is doing.

2. The financial sector stocks. Watch them closely. If GS (Goldman Sachs) crosses 155 any time today, there will be a massive sell off in almost all of the bankster and financial stocks so watch it closely. There could be an artificial rally at the open or close, but watch anything tied to real estate as the hedgies are liquidating positions as fast as they can and selling into every rally.

3. Dean. Watch the long range models at the 1700 EDT update. This storm is looking to grow into a monster and may well impact the oil markets by the end of next week. I shall update what information I get tonight on my show.