Brace yourself for another wild ride on Wall Street.
By Daniel at 27 January, 2010, 4:10 pm
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50MA - 10,449
200MA- 9,395
We’ve broken the 50, the 200 is next. “Beware the Ides of March”
Worries about the strength of the global recovery and proposals from Washington to clamp down on banks have sent fresh jitters through financial markets, prompting chatter among traders that stocks could be poised for that rare but alarming phenomenon: a correction.
Such a development would mean a 10 percent or greater sell-off in everything from high-powered Nasdaq technology shares to bread-and-butter Dow industrials.
Over three tense days last week, stocks tumbled nearly 5 percent; the Dow posted triple-digit losses on Wednesday, Thursday and Friday, ending the week at its lowest level since November.
Some analysts believe the downward momentum may continue. They say the ingredients are there: a spike in volatility (up 55 percent in the three-day period last week, according to one gauge); activism from Washington (the Obama administration’s crusade against risky banks and uncertainty over the future of the Federal Reserve chairman, Ben S. Bernanke); and concerns over the slow pace of a global recovery (worries of a default in Greece and inflation in China).
“A confluence of all those headwinds creates a perfect storm of uncertainty on a market that had already been a bit vulnerable to a pullback,” said Quincy M. Krosby, a market strategist at Prudential Financial.
“But obviously the question is,” she added, “is this going to be something more than a normal healthy pullback?”
- TFP
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