10/23/12 8:51 AM – Rough Start to Markets Today – More to Come?

Europe, which was down about a half percent yesterday is down about 1.5% today after Spain reported a deepending recession and said it would likely miss its deficit targets.

The US markets look to open down about 1% today. We had a late day rally yesterday to barely avoid a third straight losing day but today will continue the downward trend. Poor earnings announcements by DuPont and MMM are part of the issue but not as big a part as many think.

Over the last 7 weeks the US has been in a trading range and this drop today, if it holds, will drop us through the bottom of that range, not usually a good sign.

I look for a 10%-ish type correction from the recent high. Today’s opening drop will get us about 4% into that but the correction could run a little deeper than 10%.