Selling accelerated into the afternoon on Friday with financials and industrials leading the S&P 500 lower.
The sell-off was largely triggered by concerns that the odds of a double-dip recession may be increasing, after the latest jobs report showed the US lost 125,000 last month, the largest decline since October.
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Looking at new research from Bespoke, earnings revisions are in a clear downtrend, says Steve Grasso. I think companies are going to be hard pressed to show profits in the second half of 2010. There’s nothing to get buyers excited. Fundamentals are terrible and technical patterns are bearish.
As we first told you Thursday, the S&P is now on the verge of hitting something chart watchers call a death cross – a pattern created when the 200 day moving average crosses the 50-day; it’s another bearish signal.
Because of all these headwinds I expect the market to trend lower, says Steve Grasso.
I’m concerned we could see a terrible Tuesday, adds Joe Terranova. Over the holiday week-end many investors may reflect on the lack of positive catalysts in this market. That could send them to the sidelines and set us up for an ugly Tuesday; it could be a capitulation type of morning.
I agree with Joe, says Patty Edwards. And don't forget that although the US markets are closed Monday world markets will be open. It’s entirely possible negative headlines come out of the world markets on Monday; that too would trigger selling.
AUSTRALIA WEAKENS MINING TAX, COPPER SURGES
Mining shares moved sharply higher on Friday after word that Australia amended its proposed Resource Super Profits Tax.