logo
  Join        Login             Stock Quote

Is Goldman Lawsuit An Impetus For Overdue Stock Market Correction?

 April 19, 2010 09:41 AM
 


The stock market has been in a virtually unstoppable bull run since the second week of February. On February 5th, the major indices reversed a two-week slide and since then, it has been almost a straight line upward for the stock market. In the last 35 sessions, the Dow Jones Industrial Average closed higher 26 out of those sessions.

With the SEC's lawsuit against Goldman Sachs (GS), we may now have a compelling reason for a very long overdue correction. The lawsuit casts doubts on financial stocks, as we don't know which company could get hit next with a lawsuit for doing the same thing as Goldman Sachs, although with Bear Stearns and Lehman Brothers gone, the possible remaining culprits are somewhat limited.

[Related -Gold hasn’t lost its allure in my portfolio]

However, it is hard to see how the charges against Goldman Sachs could be an isolated incident, although the fact that it took so long to bring the case against Goldman raises questions as to whether the SEC could not find anything else against other companies and or decided to only go with what it thought was a slam dunk.

For now though, with the doubt casts over financial stocks with this lawsuit, it is probably a much safer play to take very quick profits on long trades and to trade with a downside bias in general for a while and stocks at such overbought levels, we should see some high volatility levels that create huge short-term trading profit opportunities.

iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageWinter is Coming! Here's My Favorite Seasonal Trade

Over the years, I've been successful trading weather patterns as they relate to commodities such as crude read on...

article imageHow To Avoid 5 Common Investing Mistakes

When it comes to successful investing, the field of behavioral finance has shown that sometimes the worst read on...

article imageSector Detector: Bulls Go Down Swinging, Refusing To Give Up Much Ground

Although the stock market displayed weakness last week as I suggested it would, bulls aren’t going down read on...

article imageThe Bumpy Road Ahead To Policy Normalization

When the dust clears from tomorrow’s Fed announcement, the crowd’s expecting that the slow but persistent read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

Melt Up Or Melt Down?
More Articles on: Finance



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.