Here we go again- to the downside ?
The stock market is in a correction. How deep and penetrating this correction will be only stock pundits and fortune tellers can hawk those numbers to you. As a Technical analyst I can only show you where it has been and what you can expect based on the charts itself. We don’t predict the stock market, nor we ever attempt to read the future. However using Technical analysis lots of nonsense is eliminated and a clear picture emerges.
The US economic news started with bad job report on May 4 , 2012. Just about 115,000 jobs were added and that splashed cold water on investors and institutional traders. The market has been on run for the last 3 months or the first quarter and when everyone thought the gravy trains will continue it suddenly screeched to a halt. Mixed bag of news also started from European countries. France elected a new President and the Socialist party came to the power. Greece failed to cover up a viable Government and the debt woes of Greece started hitting the news wire. Here is a Technical analysis video please enlarge to watch:
There was turmoil and now its an uproar. These worries are just the repeat of the summer of 2011 when it felt like the world was going to end and reminded all of us how fragile the economic recovery has been and the kind of slippery slope we have been skidding. The stocks are traveling in downward channel and unless broken to the upside the downward trend line will govern all the trading to come.