No Comments Written by Anthony Truong on October 3, 2008 – 3:21 pm

The VIX should continue to rise, to historic record highs (it’s only ticks away from surpassing the high in 1998). Of note is the fact that the EURUSD dropped below 1.3883 last night, the low of 11 September 2008. This confirms a major bear trend in EURUSD, and consequently a major bull run in the USD – that’s something you won’t hear from many analysts, given the fact that the US government has gone on a buying spree of all things crashing! (Crappy assets on the US’ balance sheet erodes the value of their assets and reduces their credit quality, thus should devalue the USD, if you look at it from a fundamental perspective)

Tonight will be interesting – the Senate passes the ‘bailout’ bill with resounding support, and yet the major indices fall. What will happen when/if the House passes the bill? What if it isn’t passed? I continue to look down. From my chart analysis, it would be IDEAL for a major major drop tonight, but…a trend never moves in a straight line. My bet is on the downside though.