The next 48 hours will define 2010 return ...

We have a nasty 24/48 hours ahead of us:

1. The GS saga is beginning to smell, feels, look, a lot like Drexel Burnham http://en.wikipedia.org/wiki/Drexel_Burnham_Lambert in the sense - ultimately Drexel could not handle the negative press. I am in NO WAY saying GS is guilty and neither am I doing prediction on their future, but the Senate/Congress clearly needs a scapegoat, and it seems GS needs to that offer. Read the Drexel failure part on the link above - and tell you do not see the link?

2. The EUROZONE crisis feel, smells like Black Wednesday in the ERM crisis in 1992 (when I  was slightly younger) - we are entering the contagion risk scenario now.

The market was closed in bonds when the down-grades came from S&;P - and now Fitch will need to follow through with their own downgrades.

The open tomorrow in govie bonds needs to be watched. Bite me if the greek market will not be closed partly  tomorrow.

3. FOMC meeting - pre-today there was outside chance of Fed playing with the words - now the small loss' will secure an accommodative FED again... so in other words.. if S&P close below 1189-00 tomorrow, we might, just might be in corrective phase.

Watch how Greek and Chinese market made new 2010 low todays.... so the weakest and strongest economy in the world both make new lows the same day ? How come no other market materially impacted?

There is 30% chance of 30/35% correction  and 70% of another 5% upside - you take your bet,

Bottomline:

The EURO needs to go to 1.10
Stocks needs to go to P/E of sub 10
Yields needs to rise substantially to pay for tail-risks
Own TANGIBLE ASSETS

and even longer view:

Yields are in final phase of a 30 year down-cycle - soon the we will see much, much higher rates driven by combination of tighter central banks, inflation import from Asia, and rising commodity prices...

Stock market is in 2nd decade of down correction which will last another 5-6 years..

Commodities in early years of 20/30 year upcycle driven by FIAT money, demographics..

These are boring long-term trades, but those are the trends you need to be ON to make money next 5 years..

Again - the next 48 hours could be the most important in 2010.