Welcome back short sellers!
Today's Financial News - Posted October 9, 2008
Washington’s ban on short-selling ended last night. Is it any surprise the markets plunged and General Motors (NYSE:GM) and Morgan Stanley (NYSE:MS) got crushed?
By Andrew Snyder
Baltimore – (TFN): Once again, you can thank Washington for today’s insane plunge on Wall Street. When the SEC extended its temporary short-selling ban last week, it did so with an eye towards protecting investors.
Unfortunately, it did not take a doctorate degree in economics to figure out it would not work. Today’s 678-point plunge in the Dow should be all the proof you need.
In case you did not know, the short-selling ban ended last night at midnight and the folks betting against the Street were invited back this morning. They flooded the market with the pent-up energy of a two-year old who had been sitting in the corner for three weeks.
Little in the way of economic news hit Wall Street today, yet it managed to sell off at historic proportions. Companies like General Motors (NSYE:GM), which received a credit-rating warning, and Morgan Stanley (NYSE:MS) were favorite targets of anybody taking a short position against the market. Shares of both companies were down by over 25% today.
Hang in there, kitty
If you are looking at your portfolio wondering what in the world will happen tomorrow, you are not alone. Today marks the seventh-straight day of losses on the Dow. It is proof that nobody wants to be in the market at a time like this.
Tomorrow will likely be more of the same, but with less volume and hopefully less red. If investors were scared to step foot onto the trading floor today, they will be downright petrified to do it on a Friday.
Selling pressure will be high on the last day of the trading week as few investors are willing to hold onto their position into the weekend, risking more negative news over the weekend when the markets are closed.
The best thing to do right now, is sit tight, leave your money where it is, and be ready to enter the market on the first sing of an upswing. Hundreds of stocks are highly undervalued. As soon as buyers return, there will be some great opportunities to take advantage of.
Next Article: Earnings Report: General Electric (GE) lives up to its word
Posted by Andrew Snyder · Filed Under Gold and Resources, US Stocks and Markets
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October 25th, 2008 at 5:14 pm
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