The Cubes (NASDAQ: QQQQ): We actually have two rally failures in a row (today and yesterday). From oversold conditions. And today was an engulfing candlestick pattern. A failure to rally from oversold conditions and a bearish engulfing pattern such as we have hear is usually a sign of more selling to come. Cheers!
Above: Picture from front page of CNN.com: Indian broker at midday, when the market was down 10% and halted. This guy is too young to remember the last time emerging markets had a crisis. Seems like he’s having to do some recalculations, after possibly believing that emerging market stocks can only go up (kind of like U.S. investors with housing prices, gold prices, commodities, and commodity stocks). This type of action comes from sentiment shifts brought about by drying liquidity and rising risk premiums. The down 10% in a day part is brought about by margin calls and people getting out at any price to make the pain stop. Russia’s RTS Index declined 9%, and the Turkish market fell 8%. See below for today’s WSJ article for more.
May 20, 2006
Make Poetry, Not War
By MAUREEN DOWD
It was a rough crowd for agents of American imperialism.
At the New School commencement at Madison Square Garden’s theater yesterday afternoon, dozens of the red-and-black-gowned graduates and some faculty were heckling, cackling, hissing, booing, jeering, whooping, bolting, turning their backs and holding up orange signs that read, “Our commencement is not your platform.” As for John McCain, he spoke about how the “passion for self-expression sometimes overwhelms our civility.”
“We’re graduating, not voting,” one young man yelled.
“This is all about you,” another called out. “We don’t care.”