In the final 15 minutes of trading yesterday, the market erased a whole day's worth of gains, over 50 points on the S&P 500 futures contract. It was like falling off a cliff.
Presumably, the late-day selloff was attributed to comments made by the CEO of General Electric, Jeffrey Immelt, who made a comment that GE will strive to merely match 2008 earnings in 2009. A no-growth comment like that brought out the sellers.
The swiftness of the reversal led many pundits, like Doug Kass of Real Money, to advise everyone later that the market is not to be trusted. Always err on the side of conservatism.
As I sit here this morning, some 14 hours later, the futures have rallied back to where they were at 3:40PM yesterday. It's as if the selloff never occurred. Crazy.
I note that according to the various roadmaps for the market as spelled out by Ellioticians, we are either in the midst of a 3-3-5 flat wave 4 retracement, heading to 1050ish on the S&P 500, or we are tracing out an a-b-c-d-e triangle wave 4 retracement, terminating around the present price level before falling off another cliff. Of course, other alternatives are possible. But I favor the flat route, as does Tom Gordon of Minyanville. We'll see.
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