Evaluating GE Earnings And Friday's Stock Market Sell Off

General Electric released first quarter results on Friday, missing analysts' projections and it slashed its second quarter and full-year profit forecasts. This sent the broad market averages skidding on Friday, with the S&P 500 and DJIA both losing 2% and the NASDAQ surrendering 2.6%.


The chart I'm posting is a daily hart of the S&P 500, which demonstrates a red sell signal a couple days prior to Friday's selling. Consequently, I saw little damage to my portfolio. In fact, I benefited from the selling.

There is something worth paying attention to in Friday's action. First, let's look closer at GE's troubles. Most of the company's losses came from its financial services business. This renewed fears that there is still more pain out there for the financial stocks.


Second, all that selling came on reduced volume. This represents a divergence in the market, where the strength of the market was not behind the day's move. Keep this in mind as we watch events unfold over the next several days. This market may still get its feet underneath it and resume that push to carve out a higher high.

Keep you risk in mind and trade well...

Christopher Smith
TheOptionClub.com