It’s said that selling ice to an Eskimo is no easy task. It’s also said that if things look too good to be true, … they probably are too good to be true.
For stocks, this was the case just four short weeks ago. Up until the April 26 top, the Dow Jones (DJI: ^DJI), S&P (SNP: ^GSPC) and Nasdaq (Nasdaq: ^IXIC) had rallied some 75%. During much of the last leg up, none of the indexes declined more than 1%. Wall Street had forgotten that the stock market can move in two directions.
In denial, Wall Street was looking for scapegoats. Greece’s debt problems were the obvious cause, even though we’ve known about them since the beginning of the year. Up until April, stocks were actually rallying every time a new bailout package was allegedly approved. There were also rumors about a clumsy, fat-fingered trader who accidentally sold a billion instead of a million shares.
Note EU-Digest: "and now the gambling game at the Wall Street Casino can start all over again - buy low, sell high, it basically has nothing to do with real business."
For more: How Low can Stocks Go? - ETF Guide
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