In the past five trading days alone the Dow has vomited over 500 points (4.4%). Meanwhile the NASDAQ has shed about 100 points (4%) and the S&P 500 has lost roughly 75 (5.5%).
Driving the whirlpool of destruction are major banks like CitiGroup…
…and Countrywide Financial…
In the past twelve months, Citigroup shares have lost as much as 57%. Countrywide has lost over 90% in market cap over the past year!
This isn’t like PetSmart or Staples or Bed, Bath, and Beyond losing millions in market cap. No. These are the very banks in which US citizens keep their spending dollars losing hundreds of billions in market cap!
THIS IS THE WRITING ON THE WALL!!
And the worst part is, John and Jane Regular have absolutely no clue what’s going on. The depth of what most Americans know about the country’s financial markets can be extended to only what they hear from snippets of Jim Cramer’s Mad Money show. They’ll be in for a surprise.
Last night China’s Hang Seng index fell another 4.5% and European markets were off overall about 5% with the German DAXX and French CAC 40 leading the way with a 6.9% and 6.6% respective loss.
The US markets were closed for holiday today but Dow futures traded over 500 (4.5%) points lower. A bad sign for longs. A real bad sign. And tomorrow I think we could see a historic loss, which may one day be a part of what they’ll call the stock market crash of 2008.
On top of the downward pressure from Asian and European markets that’ll weigh down on stocks, Bank of America reports tomorrow. And I can’t imagine that they’ll have anything good to say.
Apple also reports tomorrow. I haven’t talked to anyone who believes that they won’t miss tomorrow.
From where we stand right now, I don’t think a 750-point drop (about 6%) is out of the question for tomorrow. Of course, Tuesday’s market activity will be largely influenced by tonight’s world market trading. But if there’s ever been a time to be short…it’s right now.
Until next time,
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