Today, the stock market crashed downwards as investors start to run out of equities and short the EURO. Fear that Greece would not be able to implement its austerity plan has shaken the market.
To add on to the fire, some have blurted out that SPAIN may need a 200bln bailout too. Immediately, SPAIN PM refuted such irresponsible comments and convinced the market that SPAIN is strong. However, this did not help Banco Santander, which saw its share price plunging 8%. Though Banco Santander has more operations in Latin America than in Spain itself, the bank was not spared.
The market is most probably consolidating here. Metal stocks which have started their decline much earlier are showing some support here with United States Steel holding its $52 support and Cliffs holding its $54 support.
Tomorrow, the real news will determine whether this is a consolidation or a fake drop created by nasty banks with regards to the sovereign debt issue. The ADP payroll should show a positive addition of jobs tomorrow for a sustained rally. Otherwise, investors would most probably run away.
I believe an afternoon rally would be in play as smart investors position themselves for a good report to come tomorrow.
The GREECE austerity plan would most probably succeed. The EURO would most likely rebound from here.
This is a huge consolidation which might have killed many longs. However, the market will go higher soon. Metal stocks would most likely lead the next rally.
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