Today was a wild day in the stock market, especially for those who follow it closely on a daily basis. We started off negative and then really dipped in late morning and it looked as if the technical levels were going to break down. I sold some June expiration calls I had on the VIX and then bought some calls for Hewlett Packard and Intel at the lows for the day. This down turn is leading some to question whether this is just a minor correction or something more serious. We have already had many more down days in May than we have had the whole month of April.
So why the down days ?:
- European debt issues causing currency swings back and forth
- A major sell of in commodity prices including oil,silver,and gold
- Mixed economic data like today's lower than expected industrial production and housing starts
- Our country's uncertainty on how to re-structure our national debt
All of these facts are creating significant economic head winds. It's not all bad though. We have been in one of largest bull markets in history for a little over 2 years now and it's almost a good thing to have a little healthy correction. Anything that can go straight up can come straight down.
Our economic strength will be driven the strength of our employment numbers. If there is a silver lining in the market pull back, it's that mortgage rates are the lowest they have been all year.
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