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Of course the stock market is down this week. It had been closed for 4 days while there had been alot of uncertainty in the world. Last week the world indices, nikkei, ftse, dax, eurostoxx, topix etc. were down 7%-10% so on Monday the Dow had to go lower by 7%-10%.
Then big companies announced huge layoffs. Who the fuck wants to fly? So travel is down, service industries are down, if you ain't travelling you aren't living large in Vegas. (I wonder how the hookers are doing though?) The banking and insurance sectors are being hit because of their risk exposure. The banking industry has been under pressure all year anyway.
If a bomb is dropped you are going to see more selling as people move to cash. Fuck IBM or Cisco, I need bottle water.
The key is keep your eye on the US dollar exhcnage rate. People aren't pulling their money out of stocks and taking it out of the country, they are just putting it in short term deposits, looking for a yield, any yield. They sure as hell ain't getting now in stocks. The dollar has been fairly steady through this whole crisis. If the dollar was weakening, then people would be running out of the US and putting their money elsewhere.
Traders, real trader meaning bank traders and fund manager, have a fiduciary commitment to limit their risk exposure during times of political uncertainty and chaos so if a stock is down 15% they almost have to sell it. They need to be flat. Zero risk.
The market will come back, maybe not friday or next week. We haven't found the bottom yet, but when we do...
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