Stocks break key levels at 1120. Wall street throwing Temper tantrums?

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The stock market or S&P500 broke through its key support level  on the usual news about Greek and the  European fanfare. Those were the explanation given to the general public.  Was that the only reason it fell so hard?

Wall Street is experiencing something it has never seen before.  A surging democratic movement known as Occupywallstreet  in New York city just blocks from Wall Street trading exchange.  OccupyWall Street has now spread from its roots in Zuccotti Park to many other cities like Los Angeles, Chicago, Boston and New Mexico.  Is the  Wall street worried about it ? You bet they are. They are worried if this grows and gets media attention their own existence and their corporate structure  would be  threatened and subject to change. Americans are getting angry over lack of jobs, rampant foreclosures, and a unending economic malaise, and pointing  fingers at Wall Street where it all started in 2008.

On Saturday October 1, 2011 , few thousand protesters marched up to  the Brooklyn Bridge and mass arrested. The event has marked International headlines and media coverage. On Monday the stock market sold off viciously and lost key support on SPX at 1120, a level that was considered a floor in recent market gyrations

Daily Chart SPX

Whenever these people on Wall Street are threatened, they start selling stuff and throwing things out the window in a temper tantrum. I have seen this behavior for a longtime and over the years being a trader.  They draw attention to themselves, and show off ,and hiss like a venom loaded cobra that if you don’t stop we can damage your financial  future even further, and there will be nothing  left for you to hold in your bags,  your 401Ks and retirement accounts. They play this self losing game

I have witnessed the same behavior  last year in spring of 2010 when Senate hearing were underway on Wall Street executives , and there was a flash crash on May 6, 2010. Wall street was clearly upset and they could barely hold it. The rest of the Summer of 2010 was spent  crashing the markets up and down, as Frank-Dodd Financial reform bill worked its way through the Halls of Congress.  Every stock in the kettle was boiled over till it couldn’t turn any more. Lots of red candles on the charts. Than suddenly, everything turned green, and they picked up the broken toy and went back playing with it like a little kid. All forgotten, all forgiven. Here is video on market analysis take a look.


On the good side of things Mondays ISM data came in better than expected. That showed manufacturing activity is expanding.  There were other tell tale signs that the economy is not going into a recession. Previous growth in GDP was revised last week and is showing a 2.1 percent growth better than  before. Fridays unemployment report with non-horrible number as Jim Cramer says would help the market rebound. There are other good signs as retail sales have picked up.

Earnings season starts soon. If earnings are good it will give a boost to this market. Remember these S&P 500 companies have a record $2 trillion dollars cash hoarded on the balance sheets. Its a huge bet in cash. What are they going to do with it? So far they have not hired anyone.

 

 

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