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Vampire Market



August 02, 2011 – Comments (0) | RELATED TICKERS: EWQ , EWI , EWG

Since July 21, 2011, the Dow Jones Industrial Average has dropped lower by 786.0 points, the popular stock index is now trading below the psychological 12,000 level. This is one fast and massive drop for all of the major stock indexes in such a short period of time. The debt ceiling bill has been passed by the politicians and the stock market participants do not care. If the politicians caved on the debt deal because of the stock market they sure look silly now. In any case, there is now blood in the street, we call this a vampire market. This is when the institutions either run for cover or they step in and buy stocks. It is important to remember that it is the institutions that move markets, not the small retail trader at home with a small online trading account.

The problems in the European Union seem to be getting worst by the day. Investors are now looking at France as another weak link in the already broken European Union. The iShares MSCI France Index Fund (NYSE:EWQ) has been plummeting lower since early May. Today the EWQ traded lower by 0.79 cents to $23.97 a share. The EWQ is short term oversold at the moment, however, the trend is down and the index is trading below all of the major moving averages. If the EWQ does not bounce soon the problems in the European Union are going to get a lot worst.

Other leading European stock indexes that are trading lower this afternoon include iShares MSCI Spain Index (NYSE:EWP), iShares MSCI Germany Index (NYSE:EWG), and iShares MSCI Italy Index (NYSE:EWI). All of these indexes are short term oversold at the moment, however, that does not mean they cannot trade lower. Yes, there is blood in the street right now, this is a vampire market.

Nicholas Santiago

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