While last week showed an sudden decline of 6.3% in the S&P 500, today showed a further decline of nearly 4% or 77 pts. This was after the Shanghai Composite showed its biggest one day decline since pre-financial crisis 2007.
The inability of markets to move higher has been due to slowing earnings and concerns of sluggish GDP growth, the rallying of the US Dollar, geopolitical issues with Greece and its debt, and uncertainty and speculation regarding the US Federal Reserve and changes to fiscal policy they may enact. Add to this new concerns with China and emerging markets as a whole.
It seems that although greed and the bulls may be driving the economy for the last 6 years, the fearful bears are trying to take the wheel.
With typical capitulated selling lasting between 17-and 25 sessions, today as session 25 is particularly fascinating. If history is any indicator, we may be in for a rally to the upside, even if China is an issue going forward.
stockmktstudent 