Black Friday

The stock market rally has paused. It's impossible to say whether this is a point of inflexion and we continue up for a while, or whether the downtrend will resume. We should consider this as only a bear market rally, in any case.

Key pointers today are continued dire forecasts and comments from companies. Forecast losses. Gold edging up a little and oil down. Soft commodities firming, and metals softening on forecasts of deeper recession in Japan and China.

We are also seeing a weaker Dollar, firmer Euro and a British Pound waiting to rise. The Swiss Franc is looking good. The flight to US Treasuries is ending. The US and British Treasuries will start to have real trouble with new issues particularly longs. I wonder if we will see some new undated issues on the same formula as War Loan and Consuls?

The general position continues to be a worsening financial crisis, worsening company results and flight to gold. This is a time not to be in equities or derivatives.