The market corrected the most since February. The RUT had a pullback of more than 3%. Some of the indices broke the uptrend line. Volume was huge across the board. This is definitely a distribution day. It would be interesting to see how much of a correction we will have.
The market finally came to the realization that the debt problems with Greece could be more problematic. Troubles with Greece has been doubling for a months, but it wasn't until today that the markets realized the contagion of the problems.
An interesting thing happened with oil. Crude pulled when with the troubles over the BP oil spill. You should think that oil prices would rise, as some of the Gulf refineries will be shut down and further offshore drilling might be halted until the cause of the oil rig explosion is investigated.
The economy continues to show signs of strength and 1st quarter earnings have been great. In fact most of the companies have been able to beat on the top and bottom line. The real question is how sustainable is this growth. A lot of the government problems are coming to an end. The new home purchase credit is expired on 4/30/10. With its expiration, will the housing market continue to grow?
Will need to watch and see how the markets will react. Since we had a crash in the markets in the past year, it is not likely that we will have another crash. Periods after a crash, markets tend to trend in a range bound market for years. If this is true this will be great for some option strategies such as iron condors and calendars.
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