The market is stuggling to stay in positive territory as the overhang from the SEC fraud charges on Goldman Sachs (GS) still linger. At question is whether the SEC widens its probe into other Wall Street firms.
As such, even though Citi (C) reported solid earnings this morning, its stocks is higher (+5.9%) but the rest of the financials are treading water near the unchanged level.
Losses in Asian markets overnight were widespread, led by China which plunged -4.8% on further speculatin that the government will move to further curb speculation in the Chinese property market.
The dollar is higher today, which is weighing on commodities in general. Oil is down another $2 to $81.15, while gold is roughly unchanged near the $1136 level.
The 10-year yield is a touch higher at 3.78%; and the VIX is also higher to 18.55 after its big spike on Friday.
Earnings season heats up again this week, with all eyes on Apple (AAPL) Tuesday afternoon.
Trading comment: I think the correction that I have been expecting started on Friday, in somewhat normal fashion. That is, the market often climbs higher while volatility grinds lower, until some catalyst results in selling en masse. This is what we saw Friday, and most of the time the selloff may take a breather, but then continue in the days and weeks ahead.
There are some out there calling for another 10% correction at this juncture. I don't share this view. Not every correction needs to be of the 10% variety. And considering the correction that just ended in February was roughly 10%, I don't think we see that big of a pullback this close in time. Its anyone's guess, but I'll go out on a limb and say if we pullback in the 3-5% range, that should be another good buying opportunity.
It often comes down to sentiment also. We want to see bearish sentiment rise as the market corrects. What we don't want to see is for investors to remain complacent. But given how quickly investors have turned bearish during previous slides, I think it is likely we will see a repeat performance.
long AAPL
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