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Goldman Accusations Could Reset Market, According To Duarte

|Includes: Alcoa, Inc. (AA), GOOG, GS
April 17, 2010 (FinancialWire) -- In his Wednesday (April 14th) article featuring Alcoa (NYSE: AA) entitled “Earnings Season Puts Uncertainty Back Into The Market” (at http://www.financialwire.net/2010/04/14/firstalert-41310-earnings-season-puts-uncertainty-back-into-the-market/), Dr. Joe Duarte basically stated that paying close attention to portfolios would be a wise and timely idea. As it turns out, his sage advice was probably even more insightful than Joe, himself, realized. Yesterday afternoon, when we followed-up with “the doctor” about that diagnosis, the conversation (as well as recent developments) led Duarte to also bring Google (NASDAQ: GOOG) and Goldman Sachs (NYSE: GS) into the picture:
FW: Joe, earnings season was progressing fairly well until late Thursday. What happened?
JD: As I noted in my previous article, expectations were pretty high, especially for companies like Google. So, the Google sell-off was no surprise to me. It’s happened before.
FW: You say you’re “always worried.” Are you more worried now?
JD:  (Laughing) If you’re not worried, and you’re a trader, then you should worry. Wild and crazy things can, and do, come out of nowhere and lead to trading challenges.    
FW: What do you think of the Goldman Sachs accusations from the SEC?
JD: That’s the kind of thing that I’m referring to. The market was moving along fairly well, and seemed to be in the midst of a good momentum run. Then the news that the SEC was accusing Goldman of fraud (with regard to subprime mortgages) hit the wires, and an already wobbly day got worse.
FW: What should investors do when something like this happens?
JD:  A lot of problems with losses could be dealt with and managed fairly well if you stay on top of your portfolio. Investors should be familiar with common techniques of risk management, such as the use of charts, moving averages and other technical indicators. I provide a lot of guidance on this sort of thing on a regular basis in my columns and in my books. The key is not to panic, and to have a good trading plan in place before you trade or invest.
FW:  So preparation is the key to success?
JD:  That’s part of it. If you get caught in something sudden, though, the first thing to do is not to panic, and to survey each individual position, individually. If your portfolio is holding-up under the stress relatively well, compared to the Market in-general, then you’ve got time to make decisions.
FW:  Do you think this problem with Goldman will kill the rally?
JD: It’s early right now, and a lot could happen in the next few days. It certainly is something new, though. And it’s clearly something significant. So it’s not a factor you want to ignore. If the market doesn’t recover in the next few days, then we could see that five to ten percent correction that’s been bandied-about (by analysts) over the last few weeks actually happen.
FW: Interesting stuff to consider, Joe. Thanks for your time.
JD: Yes, indeed.
Dr. Joe Duarte invites you to follow him on Twitter (at http://twitter.com/drjoeduarte). More insight and commentary from Dr. Joe Duarte (http://www.joe-duarte.com/), can be found by visiting Dr. Joe Duarte’s “Market I.Q.” (at http://www.joe-duarte.com/free/order_choices.asp), Duarte’s “Intelligent Forecasts” (at http://www.intelligentforecasts.com/), as well as by reading Duarte’s books (available via http://www.amazon.com/), which include “Market Timing For Dummies”, Successful Energy Sector Investing," "Successful Biotech Investing", "Successful Energy Sector Investing” and "After-Hours Trading Made Easy" (co-authored by Duarte). Also, in addition to regularly contributing to Investrend Weblogs (http://www.investrendweblogs.net/jduarte/), Duarte has logged many appearances on CNBC and is a frequent radio guest. One of CNBC's original Market Mavens, Dr. Duarte has been writing about the financial markets since 1990. He is a featured columnist on Stockwatch.com. His articles and commentary have been featured on Marketwatch.com, Barron's, Smart Money, Medical Economics, and in Technical Analysis of Stocks and Commodities magazines. In 2003, Doctor Duarte received second place, in the professional section, of the Medical Economics Investment Challenge with a 12-month return of 42%.
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