Market shocks caused by the Democrats lack of fiscal discipline, and misguided stimulus efforts are being felt world-wide.  While Asian markets retreated significantly, overnight, US based exchanges are now under intense pressure from a crisis of confidence.

The next key level for the S&P to cross is 1,150.  As we continue to approach, and if we are consistently held below (and close below this level), it would be like someone hit the panic button for the subsequent days in the market. The bottom line continues that we are not in as dire of a situation as a couple of years back, where the financial system didn’t operate normally, but we are still facing significant headwinds, with no relief in sight.

VIX continues to march higher, giving the growing impression that market sentiment is increasingly becoming biased towards a real bear market.

At the end of the day, if the US government, led by the celebrity-in-chief Barack Obama, would have got serious about the spending issues we are faced with, much of the crisis could have been averted.  At this point, if our financial system grinds to a halt once again, it’s unclear if we have the capacity to print our way out of the problem.