The stock market looks vulnerable. When you make a list of everything that can go right and what could go wrong, I’m afraid the wrong list is longer. We had thought that the problems in Europe were kicked down the road far enough to give the market some room to roam on the upside. Then along came Greece and France to rain on that parade.
We thought that the U.S. banks had finally learned their lesson and stopped making big, stupid bets with their capital, and then along came JP Morgan with a whopper of a trading loss.
We thought the employment picture was gaining momentum, and then along came last week’s stumble. Ditto for the housing market. All in all, it was a pretty bad week for the economy and the stock market. I guess we should count our lucky stars that the market didn’t go down more than the 1% that’s in the official record book. But are we vulnerable to a ‘catch-up’ decline this week? Unless there’s good news that can offset the string of bad news we’ve been hearing lately, I’m afraid that the markets are going to do what they should have done last week – go down more than 1%.
(Charts courtesy of Barron’s online http://online.barrons.com/article/SB50001424053111904370004577390073797664072.html?mod=BOL_twm_mw#articleTabs_article%3D1)
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