By John Galt
October 4, 2011 – 05:25 ET
Technically speaking the U.S. equity markets are due for a bounce even as the European and Asian markets continue to implode. The news that the Franco-Belgian bank Dexia is in trouble and possibly facing a break up due to their faltering portfolio and the fact that the Euro continues to collapse versus the dollar could possibly provide further downside action today but I think the Plunger Protection Team intervenes and causes a brief, albeit useless, stand which allows the S&P 500 to bounce at this point in time. If history is any guide, the markets should bounce, perhaps up as high as 1112 on the cash S&P 500 no later than tomorrow.
By Thursday, the plunge resumes. I fear this sudden strengthening that I predicted months ago in the US Dollar will continue and as the US Dollar Index passes the 82 then 86 levels, the pattern will have an eerie similarity to the dollar strength exhibited in 1987 and the equity chart patterns will start to mirror the same. All that is needed now is a blunder by the Fed or government and the fuse will be lit for the projected crash this month. In the mean time, enjoy the Bernanke testimony in front of Congress today and the incessant pumping of Apple stock (AAPL) by the stock hucksters as the iPhone v5.0 is released today.