GLOBAL STOCKS UNDERCUT NOVEMBER LOWS -- MORE 2002 LOWS ARE BEING THREATENED -- BONDS AND THE DOLLAR ARE ONLY WINNERS -- COMMODIITES REMAIN WEAK

NOWHERE TO HIDE... Another massive loss by AIG and problems at HSBC, which is Europe's biggest bank, have helped send global stocks sharply lower today. The heavy selling started in Asia before spreading to Europe and the U.S. The Dow and S&P 500 broke their November (and 2002) lows on Friday. Chart 1 shows the NYSE Composite Index breaking its November low today. Chart 2 shows EAFE iShares (EFA) doing the same. [EAFE stands for Europe Australasia and the Far East and is the main benchmark for foreign stocks]. The Nikkei lost nearly 4% and Europe is losing almost as much. Britain is also down 4% because of the problems at HSBC which is a British bank. All market sectors and industry groups are in the red. Chart 3 shows Emerging Market iShares (EEM) falling to a new 2009 low. A lot of other stocks indexes (domestic and foreign) are nearing a test of their 2002 lows. The monthly bars in Chart 4 show the NYSE Composite Index testing its 2002 low.

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THE DOLLAR HITS FOUR MONTH HIGH... The day's big winner is the U.S. Dollar. Chart 5 shows the PowerShares US Dollar ETF (UUP) trading at the highest level since last November. Bond prices are also getting a boost from stock selling (Chart 6). Gold prices are easing a bit after trading higher this morning. Chart 7 shows the GLD moving down to test chart support near 90. Most other commodities are falling sharply today along with stocks. Chart 8 shows the DB Commodities Tracking Fund (DBC) falling to a new bear market low.

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