The equity markets sold off sharply today on fresh jitters about the sovereign debt of Italy and Spain.
It is also quite important to remember that stocks have been very overbought short term and were ready for a correction.
“Some economists, when thinking about long memory, are concerned that it undercuts the Efficient Market Hypothesis that prices fully reflect all relevant information; that the random walk is the best metaphor to describe such markets; and that you cannot beat such an unpredictable market. Well, the Efficient Market Hypothesis is no more than that, a hypothesis. Many a grand theory has died under the onslaught of real data.” Benoît B. Mandelbrot