Lets examine why the market is selling off into the close of trading...you would think, that with Warren Buffett coming out and buying U.S. bank stocks (5 billion investment in Bank of America) and saying how the U.S. economy was improving, the market would be up today (which it was earlier today). But the fact remains, that even Mr. Buffett's clarion call on the U.S. financial system looking stable and attractive, that does not do anything to address the continuing European financial issues...
Added to that, the Chairman of the Federal Reserve Ben Bernanke is giving a speech tomorrow on the state of the economy, and many traders are concerned as to what he might say. The fear is that Mr. Bernanke may not say many positive things about economic growth and there is speculation that he may go as far as announcing another Federal Reserve program to stimulate the economy. Basically, there is still too much uncertainty out there and therefore I expect the markets will continue to trade up and down with little direction.
Needless to say, investors should bring there seat belts tomorrow because we could be in for another bumpy ride.
On a positive note (gotta at least look at the glass as half full), the financial stocks performed well today, and it's nice to know I'm in good company! (see my previous post on Warren Buffet).
