Interest rate paranoia is sweeping the planet and evidently is the "out of the blue" sending overbought markets tumbling.
A headline in MarketWatch reads, "Correction in the cards?" Gee, ya think?
So, other than shorting and a few selective commodity markets, where do investors turn for safety? Cash -- since bonds and gold offered little protection.
Looking around the rest of the planet, let's just examine a few of the big names.
Paranoid? Well, maybe just skittish and prone to a quick stampede given overbought conditions. And please, let's not hear about the "sell in May and go away" mantra since, at least as of now, "when" in May is the critical and open question.
Overbought [no longer] markets have been hit by three blows: a poorly received Bernanke speech; a quickly declining bond market; and the ECB's increase in interest rates. The only thing missing will be some "piling on" by Greenspan. But, wait, he's a consultant to Bond Daddy Bill Gross, and the latter has been predicting interest rate declines. Greenie better give him something to cheer about to earn his way. But we all can be wrong, right?
Now markets are, at least short-term, oversold. Let's see if those bulls, disappointed by the prospect of no interest rate cuts, have finished selling -- and other bullish investors focused more on good earnings prospects jump on lower markets as a buying opportunity.
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