Barrage of Bad News Trips Up the Market

Market Snapshot

The Bears win the day.

Market Direction Model

Wide spread institutional selling results in large declines
across all major markets

A barrage of bad news was the catalyst that drove the markets lower yesterday. Here's just a brief list of news items:

1. The housing market is slowing.

2. Manufacturing is slowing.

3. Job creation slowing.

4. Forthcoming downgrade of 15+ major banks

5. Goldman Sachs tells its client to short the market, expecting the S&P 500 to decline to 1285.

All this in the backdrop of a crumbling Euro Zone and Ben Bernanke's unwillingness to fire up the markets with a new round of quantitative easing simply proved to be too much for the markets to bare.

All sectors declined yesterday, with the cyclical and commodity sectors getting hit the hardest. There was really nowhere to hide except for cash and U.S. Gov. Treasuries.

I took evasive action yesterday by reducing risk exposure in all GWM Model Portfolios. After such a big sell off the markets should bounce for a few days, but our impulse indicators suggest lower prices are ahead.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.