Markets free-falling

Usually Funds are buying equities in November. They finish paying bonuses based on result sthrough October, so they tend to lock in results October by selling and then start buying in November.

Instead, we see that the markets have tumbled pretty hard. It's likely that they are spooked by the Fed's statements that things aren't all right as well as fear over the ongoing onslaught of the housing bubble writedowns.

Whereas the August panic was a technically driven event (a sudden loss of credit) this is more of a psychological event.

Going forward, the only winning stocks will be those with low P/Es and strong fundamentals.

I am not buying yet. I think the market needs to go below 13,000 before it moves up.