By InTheMoneyStocks.com on April 27th, 2010 12:09pm Eastern Time
The markets are getting hammered today, following the S&P 500 small down day yesterday. Could a second down day in a row be in order? These have been few and far between in the last few months and could spell confirmation of a top in place.
One has to be somewhat amused by the sharp sell off in the markets occurring while Goldman Sachs Group, Inc. (NYSE:GS) gets grilled by the Senate. It has to continue to make people wonder if there is a battle ragging here or a little flexing by Goldman Sachs' muscle. Grill us? We slam the markets.
Granted, by no means is it surprising to see the sharp sell off. Many leading stocks are near their 2007 highs. These 2007 highs coincide with the best times in the last multi decade period in the economy when money was free and houses were 100% higher. With free money being printed by the government in the form of stimulus and the Federal Reserve printing trillions more, the markets are up nearly 100% off the March 2009 lows and many stocks are near those 2007 highs. You almost get the sense a crash would be in order, a little smack in the face for the pigs who kept loading the boat in recent weeks.
While Goldman Sachs is getting grilled, Portugal had its debt rating downgraded and was given a negative outlook. This is just one of the negatives the market has to realize in the coming months. Greece was just the tip of the iceberg. What about the next half dozen countries that need bailouts? It is coming.
Financial reform is coming to a financial company near you. That is a fact now, just a matter of time. Unemployment is still 9.7% according to the government and those of us in the know, realize it is much higher, around 18%.
So does it shock anyone to really see a sharp down day today? Perhaps only because we know how manipulated the markets can be. However, volume today is huge. That makes it very hard to hold it up in this environment.
3M Company (NYSE:MMM) reported solid earnings today. It is one of the only bright spots in the DOW. While Goldman Sachs is actually flat on the day, other financial stocks are being hammered. JPMorgan Chase & Co. (NYSE:JPM) is being rocked, down over 3% on the day. Bank of America Corporation (NYSE:BAC) is down over 2%. Retailers are also getting slammed with the Retail HOLDRs (ETF) (NYSE:RTH) down 2%. Retailers have been one of the best performing sectors in the last few months. Stocks like Polo Ralph Lauren Corporation (NYSE:RL) nearing 2007 highs and Bed Bath & Beyond Inc. (NASDAQ:BBBY) over 2007 highs.
Bottom line is this, today the markets may see confirmation on the charts. This is a key signal InTheMoneyStocks uses to determine whether more downside will come. The market has been propped up for months now, every small sell being bought and the markets pushed higher. Technically speaking, a correction is long overdue. Let's see where this market ends today. There are still hours to go.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
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