Cold Face Slap for Optimistic Traders Today

It appears that two consecutive days of disappointing U.S economic data was too much for traders to shrug off. The Dow Jones Industrial Average tumbled about 150 points after today’s University of Michigan Sentiment index of Consumer Confidence gave overly optimistic traders a cold slap in the face. Consumer sentiment which is the key driving force behind spending and economic growth clocked in well below expectations with a reading of 63.2. The Street was looking for 69.

Add yesterday’s disappointing Retail Sales and you can clearly see why traders headed back to the safety of the sidelines. As of 1:45 pm eastern the Dow is down 140 points.

Euro traders sold their currency fearing the Eurozone economic recovery may be suspect or short lived. Last on the Euro $1.4185 down 1.15 cents against the Dollar.

The poor data served to send energy traders on selling spree as well. Crude is trading $2.96 per barrel lower at $67.56. The metals were not immune with Silver slipping 26 cents to $14.69. Gold fell $8.00 to $947.00. Palladium closed unchanged at $275.00. Platinum shed $10.00 to end the week at $1254.00 per ounce.

It now remains to be seen whether the Dow can make a final hour recovery, or whether today’s action will give the investment world further cause to lighten positions in our over-extended market. It will be interesting to see how Asia reacts when it reopens Sunday night. As for next Monday the calendar kicks off the week with a fresh look at manufacturing with the New York Empire State Index of Manufacturing. See you on Monday the Asian reaction to today’s action.