Annnnd The Pull Back Begins…

filed in My Investments on Aug.17, 2009

It was only 24 hours ago that I came home and posted a quick message about the potential pull back on the markets and look at the results. All over the world markets contracted on fears of sustainability and consumer confidence. With local markets in the US falling their worst in six weeks. Even with better than expected US manufacturing data, investors were eager from the opening bell to dump holdings (just look at the side graphic to see how fast the sell-off was).

The market sell off right now could be a sign of a bigger correction that I was talking about a few weeks back. The VIX which is a favorite indicator to look for market volatility had one of its biggest jump since April which many are using as sentiment that a market correction is on the horizon. Now corrections are not a sign to panic but a part of a healthy market. Stocks do not go up in a linear pattern but will have pull backs to “rest” before rising again. Its expected that any correction coming would be in the 10% range so IF this is the sign of a pull back, we might have a few major down days before further rallies ensue.

Here is the market summary for Monday:

Tuesday:
Economic Indicators:
Housing Starts
Building Permits

News:
Home Retailers Suffer

CIT Posts $1.62 Billion 2Q Loss; Credit Provisions Surge.

Rosetta Stone Cuts Outlook; Shares Fall 27%

China Stocks May Drop Further 10% on Loans, Xie Says.

Happy Investing!

Aman, MBA