Monday, January 12, 2009

Stocks fall for fourth straight day

Stocks fell further today on fears that corporate earnings would fall far short of expectations. The Dow finished at 8473 and the SPX at 870 as stocks slipped further below their 50 day moving average. In Mumbai, the arrest of Satyam CEO Raju did little to calm investors as stocks fell 3%. The Nifty ended trading at 2773 and the Sensex at 9110.

Even if the market bounces back tomorrow -- and that is a very big if -- I think there's a good chance that the Dow will fall below 8400 this week. It may stay above 8200 before turning around, but I think the market has to move lower before it can make a sustainable rally. The Mercury-Saturn aspect is close enough to get the blame for today's bearishness but I think there's more pessimism left in that aspect that remains to be made manifest. Similarly, the Indian markets are looking to pull back further this week, perhaps by a greater proportion than US markets.