I have often said how sentiment is a powerful indicator to forecast the stock market. My sentiment indicator turned bearish two days ago and the FTSE declined sharply. In the US the S&P was down 2 percent in a single session. This time the decline started with a new crisis in Argentina. The country missed a payment deadline raising fears that Argentina's default could have a domino effect on other countries.
The strong US GDP data on Wednesday did not help, investors are now concerned that the Fed will raise rates earlier than anticipated. All this comes at a time when most companies have reported their earnings, the good news is in the price, now investors are taking money off the table because there are simply too many uncertainties including new sanctions against Russia. But bull markets are difficult to kill, in a long term bull market this sell off is probably another opportunity to buy stocks for the next move up.