Is anyone shorting here? I would think today would be the day to do it. I agree that we are likely to see another leg down and I think it will come about because of the problems in Alt-A and Option ARMs.

However, I think that Bernanke has mostly saved the stock market at the expense of the dollar. Instead of making speculators bear the brunt of the housing bubble (and thus crashing the stock market), Bernanke has slashed interest rates, which has eroded the value of the dollar. Bernanke has in essence forced savers to take some of the pain.

I’m no longer expecting the market to go down big. It may test the low of 11,500 or so sometime again this year, but I don’t see it getting any lower than that.