Market comments for Aug. 26th 2011 (UPDATE)

This morning, the second estimate for GDP for Q2 came in at 1.0%. The first estimate was 1.3%. Also, Michigan Sentiment data will be released just before Bernanke speaks at 10:00am. Expectations are for 55.8% and I will update this post at that time. Gold is up in European trading $23/ounce. All European markets are down about 1% or more at this time. Dow Futures as well as the S&P and Nasdaq are also down in premarket.

Germany’s DAX Index (DAX) ended the day yesterday with a 1.7 percent loss, recovering from an amazing 15- minute plunge of 4 percent.

Ahead of Bernanke’s speech today, traders hedged their investments by selling DAX futures, lifting volume to a quarter of the daily average within a 30- minute period. That dragged down the index, pulling equities in the U.S. and throughout Europe lower, and drove Treasuries and the dollar higher yesterday.

European markets closed yesterday, then French, Italian and Spanish stock-market regulators extended bans on short selling introduced this month. Lots of nervousness out there.

Federal Reserve Chairman Ben S. Bernanke begins a speech in Jackson Hole, Wyoming, at 10 a.m. New York time.

UPDATE 6:24am PST

The Put to call ratio has been up over 1.0 for 20 consecutive days. The last time it was below 1.0 was July 26th, one month ago to the day. To me this says that the markets have been very bearish, even though there has been rallies, and that the trend is believed to continue to be bearish and the market will go down. That's where the money is now! Where's yours?

Come back for the Michigan Sentiment data in about a half hour.

UPDATE 655am PST

Michigan Sentiment came in close to expectations. The reading was 55.7 versus an expectation of 55.8, so not much difference and much better than last month's reading which came in at a 54.9 reading.