Market Opinion: Euro and Europe is driving markets down

The real problem here is Euro and Europe at the moment.   Dollar is breaking out from resistance, Euro is breaking down from support.  Are these real or fake moves?  The answer depends on whether the Europe crisis will lead to a Lehman II event or not. Yesterday WSJ ran an article titled "Feds prepares to take action", with detailed thought process and options followed by Feds right now.  This can be Bernanke's intentional leak of their plans and to get WS's feedback to help them make the choice on Sep 20-21 meeting.

With VIX at 40, TLT at 113, German DAX index close to 5000 key support level and Shanghai Index at 2500 bargain level, my gut feeling is leaning towards a bottoming scenario rather than "Lehman II" scenario.  Nonetheless, as always, prepare for the unexpected!