Well, that was fast.
In the name of "...We need to stabilize/repair our financial systems. We need to get credit flowing again. To families and businesses. We need to stem the spread of foreclosures. That are sweeping our country..." The spending bill passed the Senate.
In reaction, stock values dropped. As I write, the markets are still open. Here is the current data:
- The VIX (fear index) is up 8.43%
- The TRIN (bearish trade volume indicator) is up 515.63%
- The Dow index is down 4.78%
- The Financial Sector ETF, FAS, is down 4.3%
- The NASDAQ is down 4.13%
All of these numbers are continuing to worsen. I will quit watching them so I can conclude this post...
Here is the point
I mentioned yesterday that the NASDAQ was in a confirmed rally. In light of today's news and market reaction, that is no longer true; the rally lasted 11 days and has now ended prematurely. Further, the Dow is so devastated, it has fallen lower than recent lows and might be reaching out to test the two month low.
To my friend Brian, and other position trade readers, you will only want to make longer term trades in a bull market. Yesterday, we had that in the NASDAQ. Today, everything has changed.
Since business is being devalued and personal wealth is reduced, financial market stability is now much more at risk. I hope that your mortgage payment is not placed at risk by renewed stock market losses, I know that many are.
Many people (weather they know it or not) are depending on the success of the stock market. Businesses, IRA's, 401K's, and even some seemingly unrelated investments (i.e. insurance annuities) are all tied to the success of the stock market. It seems to me that this spending bill has already done a lot of harm to to America and nobody, (even those who voted in support of it) has taken the time to read it.