what a dreary day. thanks ge...although the dip buyers made a valiant attempt to buy the opening weakness and it was looking like the damage from the GE news might be contained, after we broke the morning lows during the New York lunch hour, the major indices spent the remainder of the session sliding lower to close out the day by losing more than 2%.
for the technicians out there - not only was the action ugly, but it also undid much of the progress this market has made since the start of the second quarter, quelled the positive sentiment that had been building, and sent each of the averages back below their respective 50 day moving averages. moreover, this breakdown comes right as earnings season is set to get underway in earnest. it is obvious that the market was not expecting the GE miss, and even though overall expectations are low for first quarter results, many are starting to worry they aren’t low enough.
that stated, the averages have yet break short-term lateral support levels from the end of march. we’ll have to see if they hold and how investors react to several key earnings reports next week, but the sort of action we saw today suggests that a more cautious stance is warranted as we wait again for this market to prove itself.