Friday, April 16, 2010

Oil Drops on Goldman Sachs (NYSE:GS) Fraud Charges

Oil falls on news of fraud charges against Goldman Sachs

It seems almost everything responded negatively to the news Goldman Sachs (NYSE:GS) was being charged with fraud by the Securities and Exchange Commission, including crude oil, which dropped by $2.70 to $82.81 a barrel on the NYMEX.

Equities and other commodities fell as well, with gold prices getting hit hard, dropping by over $24 in mid-day trading.

In what appears to be an over-response to the relatively benign situation, it tells me traders know the market is flying way too high, and with commodity prices, for the most part, at very high levels as well, anything that spooks traders and investors seems ready to put heavy downward pressure on the markets.

Investors are getting leery of the optimism being portrayed by the media concerning the markets, and they know much of it is hype and not based on fundamentals, and the market is poised for a heavy correction, as evidenced by the response to something that shouldn't be taken as that big of a deal.

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