World Markets Tumble

The market continued to free fall in the last hour of trading today. Too bad I made very little money on it, doubting the bearish signals that occurred throughout the day.

The Dow Jones Composite has fallen below the 50-day moving average, a technical indication that these drops may not be over. The VIX, which measures volatility, surged to over $22 at the close. This is an indication that uncertainty is back in the market.

World markets dropped heavily over night on news that Greece and Portugal bonds have been downgraded by Standard & Poors. The S&P believe that the two countries have a higher probability of defaulting now and noted that bondholders should expect to get about 30 per cent back on their original investment if the small nation goes bankrupt. Greek bonds are now below investment grade.

The market's recent wave of negative news coming out of Europe has dampened the market's rally. As we head into the summer months (historically not as profitable), many may have started the selling early. The world's markets have shifted its focus back on Europe and what will transpire.

Personally, I would like to think that Greece and Portugal will not go bankruptcy, as we have already seen the EU attempt to bail out Greece in the past few weeks. Once the ordeal boils over, I believe many will see this as yet another buying opportunity. But let's just hope I'm right.