On Tuesday investors flew into ‘sell first and ask questions later’ mode after a slew of negative catalysts emerged giving jittery investors every reason to run for the exits.
And at least some of the sentiment shift had to do with the latest calls from Goldman Sachs.
First the firm shook oil markets after its analysts called for the significant correction saying that the fundamentals did not support the recent run-up in oil prices; that too much of a risk premium was now built in.
Then Goldman called financials on the carpet with the firm's analysts slashing estimates on Morgan Stanley by 60% citing expected weakness in currency trading and investment banking revenue.
To maker matters more precarious, Japan raised the severity of its nuclear crisis on Tuesday to the maximum level -- on par with Chernobyl
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Tim Seymour does not think the sell-off is a one day event. He’s very focused on the technicals, specifically the outside reversals made by oil as well as commodity-related equities such as Freeport McMoRan and Alcoa. “These charts are telling us something. I think the market is concerned about growth,” he says.
He also points to the slew of upgrades in materials and in metals, which he takes as a contrarian sign. “The Street almost euphorically is running to upgrade these names.” He calls it a cyclical top.
In addition Seymour does not think the dollar continues its decline – generating yet another headwind for stocks.
Brian Kelly is also jittery. “If there’s any hint that global growth is slowing the market will (likely) get slaughtered,” he adds. He also points to the weakness in semi conductor stocks. Over the past year semis have led the broader market and they're struggling.
Although he's long-term bullish, Joe Terranova shares the caution in the near-term. He thinks a lot is riding on earnings and current expectations are high. “Nobody can really miss,” he says. He too is focused on technicals, which he considers “awful.”
Guy Adami is focused on the Vix. “It didn’t explode to the upside,” he says, “so maybe in the short term the S&P is near the bottom.”