Some positives

Weekly Unemployment claims came in better than expected at 395K. This is a an encouraging trend. This is actually the best reading since April. It is a good indication that the US economy is not deteriorating. If  the credit crisis in Europe is resolved soon then there might be a good chance US economy should avoid recession. Another positive is that insider buying is now the highest since March 09.

The problem we are facing is that we are starting to see 2008 type scenario in Europe. S&P Futures were down sharply at a point in the morning as an article from Reuters claimed that some Asian banks are cutting credit lines to French banks. The problem with this kind of lack of confidence is that a run on a bank is self fulfilling and could bring down a bank even if it is not really in trouble. The one difference between 2008 and now is that back in 2008 almost all banks in US and Europe were cutting dealings with each other, right now it is limited to just European banks and specifically french banks.

I think the current situation might be a good time for long term investors to start following the insiders and put some money to work.

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