Equities Beg for Life: Looking Ahead
It's official -- the bears are out and they're in a foul mood.Friday's drop quickly erased all the gains we'd hoarded in January.
Unless traders exhibit a little restraint, the high expectation environment we're in could lead to further stock price erosion in the weeks ahead.
This week's selloff arose from a perfect storm of negativity.
Bin Laden emerged from his hole. Oil's high again. The yield curve fell on its face again.
And earnings from bellwethers Citi and GE stunk the place up.
Even Google's (GOOG) in a heap of dung -- the search giant threw a dagger at the government on Friday.
Didn't these guys read Oedipus Rex? The Greeks call it hubris.
After shares of Google sliced the critical $400 support level on heavy volume, our $600 price target looked like a sick joke. Google dropped 15% this week.
By 2 PM, we'd had enough. We were looking for a ledge and a bottle of tequila.
Next up to bat is Bank of America (BAC) -- the #2 consumer bank reports 4Q earnings on Monday.
While we won't get the "special items" nonsense Citigroup spit out on Friday, we're expecting BofA to suffer from interest rate pressure as well as declining margins on their lending business.
In addition, analysts are expecting a massive loss from the bank's credit card business.
Until then, we'll be at the pub crying in our beer and lamenting the Dow.
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