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Markets are down across the board…stocks plunged at the open this morning with worries over a congressional debt-reduction impasse (the Super Committee, not surprisingly, has become a Super Flop), adding to escalation in the European debt crisis…so cash is King again today…as of 8:30 am Pacific, Gold is off $35 an ounce at $1,690 (strong support at $1,675)…Silver is down $1.34 to $31.07…Copper has declined 12 cents to $3.28…Crude Oil has lost $2.26 a barrel to $95.41 while the U.S. Dollar Index is up a quarter of a point at 78.25…the Dow and TSX are each down more than 200 points…the HIX and HXD short ETF’s, which we’ve been writing about in recent weeks, are both up significantly today, of course, but taking a look at their overbought Stochastics suggests now could be a good time for traders to lock in some profits with a view to re-entering on a pullback…the TSX has corrected about half of its gains since the October 4 low…

Some stark comments out of China…Wang Qishan, the Chinese vice-premier responsible for overseeing the financial sector, has predicted the global economy will slump into long-term recession and warned that China will need to deepen financial reforms to cope with the fallout…“Right now the global economic situation is extremely serious and in a time of uncertainty the only thing we can be certain of is that the world economic recession caused by the international crisis will last a long time,” state media reported Mr Wang as saying over the weekend…

The CDNX has fallen below critical support at 1575…it’s down 47 points at 1560…of course there could be an intra-day reversal and the Index could close above 1575 today, but we’ve been warning for weeks that there is trouble ahead for the CDNX (and the markets in general)…the writing is on the wall…the CDNX bear market could very easily intensify during the first quarter of 2012, so now is not the time in our view to be jumping into the speculative juniors in particular…pressure from tax-loss selling over the next few weeks will not be helpful for this market either…of important note is that the CDNX 300-day moving average (SMA) is in the process of reversing to the downside, and that’s very bearish in terms of the “big picture” outlook…yes, there could be a rally but any rallies will be sold into with the expectation of better buying opportunities during the first quarter of next year…

We do see opportunities at the moment in some of the producers…New Gold Inc. (NGD, TSX), for example, which we featured in a chart yesterday, is heavily oversold which suggests a near-term bottom of some sort (in Gold and/or the equity market) could be close at hand…NGD is currently off 30 cents at $10.23 after touching a low of $10.08…it’s down from a high of $12.25 just a week ago…it has strong fundamentals and is one of the lowest cost producers in the industry…another situation worth watching closely is Richmont Mines (RIC, TSX) which is approaching its rising 100-day moving average (SMA) where it has had rock-solid support all year…in addition, RSI(14) has declined almost to the June and October lows while the Slow Stochastic oscillator shows significantly oversold conditions…at $10 per share, RIC’s market cap would be just $330 million and the stock would be trading at only about 12 times anticipated 2011 earnings…below is an updated chart from John on RIC which fell as low as $10.43 this morning and is currently at $10.65, off 49 cents…the “sweet spot” on RIC appears to be between $10 and $10.50 per share…