The bloodbath awaits.
A huge fall on Wall Street overnight, down around 2.5%, backed up by even steeper falls in London and in the Eurozone, ensures a serious hit awaits on the opening bell.
Quantitative Easing dominated fears overnight. For Australia, there is the added spectre of problems in China along with major falls in commodity prices, which fuelled further selling in the Australian dollar. It dropped below US92c, widening its trading range this week alone to almost 5c.
But the question needs to be asked. Is this selling frenzy overdone? And the answer would have to be yes, although it would be a brave trader who stood in the face of this onslaught.
US Federal Reserve chairman Ben Bernanke on Wednesday night virtually repeated everything he said just a month ago. It was an attempt to articulate and clarify the obvious; that when the economy recovers, the easy money will end.
For America, the selling avalanche has been sparked by two fears. The first is that Wall Street has become so addicted to artificial and experimental stimulus that traders cannot contemplate a market driven by fundamentals.
The second is more serious; that America’s economy is nowhere near healthy enough to even think about winding back the stimulus.
The enormous shifts in global capital now underway has seen investors abandon any market associated with risk.
Equities are out, the Australian dollar has been shunned, commodities abandoned.
After being seriously overvalued for more than a year, the domestic currency appears to have dropped to a more realistic level, which will provide a major boost to corporate earnings, both for exporters and import competing industries.
As volatile as this transition is, it will create opportunities for domestic investors. The great irony of the current uncertainty on financial markets is that it has been driven by fears that the world finally is emerging from a crisis.
In more normal times, that would be cause for celebration.