As I commented earlier, do you think this may have anything to do with the progress of the illegal immigration bill through the Senate? It has an eerie feeling of Hawley-Smoot and 1929, where a very, very bad bill seemed to have its own momentum and no one could stop it.
All this is inflation related. The recent runup in the market was because Wall Street thought the interest rate hikes were done. However, inflation is picking up and the Fed will raise rates to try and tame it (they will fail in my opinion).
I'd say the fear of higher interest rates is having a larger impact than fear of a vote for Pedro.
Today, fear is winning.
IMHO, Wall street is governed by a herd mentality, and tends to stampede either up or down. The brokers and inside traders will make big bucks either way, while the small invertors will get screwed. It might be interesting to see Cavuto try and explain this away.
buying opportunity.
nothing to do with immigration
everything to do with inflation reports
Time to BUY!! :)
Let's see if Bernanke is as dumb as Greenspan was. He raised interest rates as the cost of energy was squeezing business profits.
I have no confidence in Bernanke at all. Not since he whispered sweet nothings in Maria Bartiromo's ear.
"The sky is falling", Chicken Little
Looks to be a run to cash. Everything getting sold and gold just turned red.
Getting smoked on energy...E...OUTCH!
No repos? Looks like a battle of the fiats.
I believe it was J.P. Morgan, who, when asked by a reporter what he thought the market would do, replied, "It will go up and down".
http://www.newyorkfed.org/markets/omo/dmm/temp.cfm
The Fed has offered for auction appx $20 bil in Treasuries and agencies and there are apparently NO takers. None. Not even at rates below the current prime rate. And only 4.5 Bil of 21.2 bil offered in mortgage backs. Apparently, folks are catching on that the dollar is set for a serious devaluation. They don't want the debt, they don't want the coupon. Ahhh, but our exports will soar blah blah blah.
Consider the percentage of the drop. PLEASE!!!
This time last year (and the year before, and the year before, and the year before and....)
May 2, 2005
Worst six months on tap?
A choppy market worried about inflation and interest rates now has another issue: seasonal weakness. By Alexandra Twin, CNN/Money Staff Writer
http://money.cnn.com/2005/04/29/markets/worstsixmonths/index.htm
NEW YORK (CNN/Money) - You think the stock market's been troubling lately? Get ready for what's often the worst six months of the year.
The period from May 1 through Oct. 31 is usually not so great for stocks, as the old Wall Street saw "sell in May and go away" tells you.
But followers of the hemline indicator, the Super Bowl indicator and the dreaded Shaq curse will also tell you that these so-called Wall Street indicators are suspect. The trends can sometimes be chalked up to coincidence and they typically analyze too few years to be relevant statistically.
Still, as indicators go "the seasonal tendencies can provide a good backdrop," said Ed Clissold, senior global analyst at Ned Davis Research. "But they have to be taken within the context of whatever else is going on in the market."
And to be sure, many of the issues that are troubling investors are unlikely to just go away anytime soon.
Click here for the earnings scorecard.
Those include the slowdown in economic growth, the commensurate deceleration in corporate earnings growth, the steady rise in short-term interest rates, and -- oh yeah -- soaring prices for oil and other commodities that have pushed up the pace of inflation. (For more on whether "stagflation" is making a comeback, click here.)
The best of times ...
To demonstrate the strength of the November through April period versus May through October, the Stock Trader's Almanac tracks the gains you'd see if you invested $10,000 in the Dow industrials on Nov. 1 of each year and then sold April 30.
If you'd done that every year since 1950, you'd have earned $492,060 on a $10,000 investment, according to the Almanac. But if you'd reversed the whole process, and invested the compounded $10,000 during the May-October period, after 54 years you would have ended up with a $318 loss.
For the S&P, the gains would be $349,165 over the 54 years during the "best" six months and gains of $7,102 during the "worst" six months.
Of course, it seems perfectly logical that if the last six months weren't so great for the market, the next six might not be so bad. But does that mean a pickup is ahead for stocks?
The current strong months for the market, measured by the "Sell in May" indicator, ended Friday, with a whopping 0.4 percent gain for the Dow, and a 1 percent rise in the S&P 500.
But seasonal factors are always going to be in play to some extent, since that's a function of the "habitual behavior of society, which extends to stocks," said Jeffrey Hirsch, president and editor of the Hirsch organization, which publishes the Stock Trader's Almanac.
... and the worst of times
The second quarter, which starts in April, tends to be weaker, as the positive effects of holiday bonuses and the holiday retail sales period fade out, and a "spring cleaning" mentality kicks in, Hirsch said.
As summer rolls around, people would rather be spending less time in the office and more time enjoying the weather. That change in psychology often extends to the market as well, Hirsch said, with lower trading volume and more rangebound markets.
When the fall creeps in, the psychology switches to getting back to school and back to work and, from a stock standpoint, to cleaning house. To that end, September is traditionally the biggest loser on a percentage basis for the Dow, S&P 500 and Nasdaq.
October, which starts the fourth quarter, can be tough at the beginning but usually turns around by month end, and the quarter as a whole tends to be more upbeat, especially once work bonuses and the holiday sales period kick in.
Bulls destined to be beached?
So will this year be any different? The Fed is expected to keep raising short-term rates when the central bank's policy-makers meet Tuesday, due to the pressures from higher energy prices and other inflationary trends.
Meanwhile, as the recent weak retail sales and slide in first-quarter GDP growth make clear, fears about an economic slowdown are not unfounded.
But some market pros said stocks are more likely to churn over this period, rather than fall much.
And some are looking for something a little better.
As the months wear on, and "investors realize that the economic growth will slow, but not halt, and that the consumer is not tapped out, stocks may be able to move a bit higher," said Jon Brorson, head of growth equities at Neuberger Berman. Top of page
*
Google Results 1 - 10 of about 144,000,000 for sell in may and go away
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Sell in May and go away? It's never that simple - Boston Business ...
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Sell In May And Go Away!
The old market cliché of "Sell in May and go away" is out in full force again. While it may be a cliché it is one that generally works. ...
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May brings start of worst six months for stocks. - May. 2, 2005
The period from May 1 through Oct. 31 is usually not so great for stocks, as the old Wall Street saw "sell in May and go away" tells you. ...
money.cnn.com/2005/04/ 29/markets/worstsixmonths/index.htm - 40k - Cached - Similar pages
Sell in May and go away! | Financial Planning
This old London stock market adage may prove more true this year than last. Interest rate rises are moving closer, geopolitical tensions are high and the ...
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London Stock Exchange - Sell in May and Go Away? Not So Fast
A second issue worth thinking about is the old stock market saw advising us to "Sell In May and Go Away...". History teaches that Sell In May is a useful ...
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Sell in May and Go Away
Sell in May and go away.
seasonal-effects.behaviouralfinance.net/sell-in-may/ - 2k - Cached - Similar pages
Bloomberg.com: US
May 1 (Bloomberg) -- ``Sell in May and go away'' became a Wall Street axiom two decades ago, thanks to the Stock Trader's Almanac. The strategy may be more ...
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FPA Journal - July 2003 - Investment Research: Sell in May and Go ...
Investment Research: Sell in May and Go Away? Not So Fast by Mark Riepe. ... It turns out that “sell in May and go away” was an also ran when compared with ...
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Trader Mike: Sell in May and go away!?
Sell in May and go away!? May 01, 2003. Once again May is upon us. Many a researcher has pontificated on the performance of the market between May and ...
tradermike.net/2003/05/sell_in_may_and_go_away - Similar pages
[snip]
The Media is Rejoicing!
"Concerns over the economy...inflation fears..."
Jeez.