Market Takes Big Hit on PIGS and Jobless Claims

On February 4th the equity and commodities markets got crushed after fears of budget issues with PIGS (Portugal, Italy, Greece, and Spain) rattled investors in the Euro zone and continued to cause angst in the US markets. The dollar also weighed on commodities.
It's hard to take these moves seriously when the news of the day drives the market dramatically up and down, with the end of the world one day and an economic rebirth the next. The best thing for investors to do is keep their wits about them and evaluate their long and short term objectives and not get caught up in the capricious market undulations. Over reactions to the swings in the market can indeed ruin a portfolio. If you are in it for the long haul, it's best not to watch the market every day. If you are a short term investor or trader, it makes sense to stay defensive and hold small positions and honor your stops.
The market rally that started in March 2009 is officially over. Several technical levels have been breached. The S&P 500 closed below the technically significant level of 1,073 and closed at 1,063. The Dow fell below 10,000 for the first time in 3 months and closed just above the important psychological benchmark. I think the market will remain volatile and we will see a bounce back that reassures investors only to be followed by further declines.