Unfortunately

Unfortunately, what happens next can be very ugly if we can’t turn it back up right away next week. We went into the weekend 55% bearish but we had a discussion about what to do on a "Black Monday" - very sobering discussion for a Friday afternoon. Our fear is that Japan, which has been closed during our 200-point drop of the last 2 sessions, will wake up on Monday to see that the dollar is now 95 Yen or less and will gap down 5% so we’ll be watching the critical 7,800 line on the Nikkei, who are the first market to open Sunday night. The Hang Seng already gave up 2.5%, completing the requisite 20% pullback off their recent run and a drop in the Nikkei is likely to push them under the 12,800 line as well.
Since the FTSE, DAX and CAC are all percariously balanced at their own 10% lines, WITHOUT the requisite 20% retrace so far, we can imagine a poor Asian session leading to a minimum 2.5% pullback in Europe. If we open Monday morning with Europe already down 2.5%, it’s very easy to…