Harder times lie ahead

As the world deleveraging process continues, commodity prices turn soft. Deleveraging means that people will be tightening their belts and using less of everything.
However, I don’t get the feeling that Americans believe that hard or harder times lie ahead. All one has to do is survey the car-filled freeways or check out the crowded restaurants to realize that Americans, for the most part, are still sipping from the punch bowl.
As for the timing of trouble, we should have our eyes glued to the stock market. If or when the Dow breaks below 12,000, that would be my first danger signal. Below 11,000 on the Dow would be my second danger signal. And below Dow 10,000 would be my signal for “all out trouble.” In the meantime, we wait and watch and avoid doing anything stupid like loading up on stocks.