Today's Markets

What a way to start the week. First, we learned the financials are not doing that well, with Wachovia and Washington Mutual both firing or limiting their respective executives powers. That reminded people that things are not that good in the financials. S&P cut their ratings on Lehman, Merrill and Morgan Stanley, stating, "The outlooks on the large financial institutions sector in the U.S. are now predominantly negative". And then we got this news about construction spending and manufacturing:

Dark clouds continue to hang over the economy: The manufacturing sector shrank for the fourth consecutive month, construction spending has been falling for more than two years, future orders are down and prices are skyrocketing.

The few bright spots, such as strong exports, may be the only things between us and a protracted recession, analysts said on Monday.

As a result, the markets tanked hard.



The SPYs dropped hard at the open, evened out and dropped again before rallying a bit. But the rally was pretty unimpressive considering the size of the morning hit the market took. Most likely it was bottom fishing going on. Also note the market wiped out a majority of the last five days trading gains.



The QQQQs also broke trend a five day uptrend today, following a trading pattern similar to the SPYs.



The IWMS have been rallying since a week before Friday. That rally is now gone with today's action.