Meltdown

Bruised and bloodied bears must have felt a rare sense of exhilaration yesterday as trading on the NYSE drew to a close. That, and a twinge of anxiety about whether U.S. stocks could actually fall for two days running. Some traders evidently decided not to bet on it, and so short-covering drove the best rally of the day in the final half-hour.  After all, who would have had the guts to take a short position overnight in a market that has been on a wilding spree for 14 months?  Some short-covering is bound to occur at the tail end of any day on which the Dow has fallen more than 200 points, as it did yesterday. But the fact there wasn’t more of it, and that the lows penetrated some key supports identified in yesterday’s commentary, suggests there is more selling to come.  Bear in mind that Tuesday is a dangerous time of the week for an all-day selloff to occur, since it leaves three days for the selling to mutate into panic. The ostensible reason for yesterday’s decline, which saw the Dow down nearly 300 points at its lows, was news of fresh trouble in euroland. But decide for yourself whether this is really news:  “Global markets tumbled as investors questioned the viability of plans to bail out Greece and fretted about knock-on effects in other nations.” That’s how the Wall Street Journal saw it, but the story is getting to be so “dog-bites-man” that its impact on the markets is probably overrated at this point. Make no mistake, an historical day of reckoning awaits euroland and its politically fraught currency when Greece’s fatal debt disease is suddenly discovered to infect all of Europe. But for the moment, we can only stifle a yawn when we read on one day about how