The S&P 500 today is testing a trend line that it has held for 10 years. If it closes below this trend line, we will essentially be in official recession territory. It's possible we get a bounce from the trend line, but only if the administration walks back this 30-day European travel ban they announced in a panic yesterday. The travel ban will cause massive supply-chain and other business disruptions that aren't yet fully priced in, so I don't really see any prospect for a bounce as long as it remains in place. In addition to business disruptions, we haven't even had a taste yet of the financial crisis that's likely coming later this year as companies and homeowners default on subprime debt. This is going to be a bad one, and there's money to be made from puts on the S&P over the next few months.
