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Wednesday, April 17, 2013
Today market was surprisingly sold, it came to my attention a stock, Bank of America (BAC), down 6% and counting, this fall seemed originally an overreaction by the investors who punished it for not meeting the earnings estimate by 2 cents. But, when taking a look at the sectors, banking, materials, healthcare, technology, basic materials, services, etc. it was a bloody Wednesday. SP500 (SPY) is down 2.88, 1.8% and going down. Mayor market movers are going down, and Apple (APPL) is hitting $400 per share, the old Steve Jobs era saying "I'd buy it if it's shiny and made by Apple" seems to not to be so valid today.
There were some earnings reports, Goldman Sachs was severely punched yesterday after an amazing earnings report. Normally it's the other way around, but the market thought that it made sense to apply the rule, if something is too good to be true, then it means it's too good to be true, and the argument was that those were signs seen before the house bubble in 2008. So many people decided to go to the sidelines and see what happens.
This is a massive stampede where the indexes are going down, and where the only happy people are the pessimists who decided to go short on time.
The recent events in Boston, the suspicious packets found, and the generalized growing psychosis are starting to pay its toll.
For a while it has been speculated that SP500 will go down since it has reached top values since before the recession, now, the good question, considering it has failed to catch up with the uptrend channel, this could be the first sign of exhaustion, and eventually a market pullback. Gold has hit new lows, so it starts to become a commodity to consider for runners.
The factors to consider today are, is this a day when investors simply take utilities? or A major index correction take place after the euphoria seen for the last few weeks?
Probably sticking to the stop levels, going to the sidelines, or short and wait for signs of recovery is a wise decision at this time.
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Posted by Hector R. Madrid at 9:57 AM