Friday, May 07, 2010

The stock market could be erratic for some time to come; keep it conservative, please

Nick Godt has an important MarketWatch story on Yahoo! on the expected volatility of stocks ("Stocks have miles to go before they sleep), and they could be in for real corrections, as in this link posted Thursday night.

Friday investors seemed to take more confidence as the jobs situation seems to be improving. However some of the jobs are temporary, relating to 2010 census taking.

“Conservative” portfolios were relatively little affected yesterday, however. Does a crisis in some smaller countries in Europe mean that everything will spread to debt-ridden US quickly? Is this a sustainability question?

Investigators are looking in to a human error where a broker mistakenly tried to sell 16 billion instead of 16 million shares, causing the sudden drop mid-afternoon Thursday. The computers did not catch it immediately, or did they. This reminds us of the programmed trading issues with the Oct. 1987 crash.

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