If Tuesday was considered to be Brown Rally, can we tag today as “Obama Sell Off?”

It is possible that Mr. President is bothered about boosting his approval ranking after a harsh reproach from the electorate. However, today he has dropped a bomb, if not an atomic one, on the banks.

He peacefully declared his new measures to border the risk taken by US banks. However, the Wall Street was very far from being peaceful. Most stocks hammered immediately after he unveiled his new bank plan, which was almost a surprise to Wall Street. It seems that President Obama smacked US banks directly between the eyes.

DJIA lost 213 points, almost 2%, and concluded at 10390. This is its worst plunge since October 30, 2009. S&P 500 lost 22 points to end at 1116 losing 1.9% and Nasdaq Comp dropped 26 points or 1.8% to 2266. Crude prices dropped, Treasurys surged, while dollar saw no change.

The new proposal introduced by Obama will not allow banks to conduct commercial trading operations nor will it have proprietary trading desks. To remind the readers, it isn’t the first hand grenade Mr. President has hurled on banking sector this week.

There isn’t any correction noticed, not it seems to be happening in near future, in the market. And such policies will create increased sense of hesitation among traders. If the government wants the market to be corrected, there needs to be an end on such attack on Wall Street. Such comments and plans by President will induce the market to plunge further on Monday.

Two major plunges in a week don’t necessarily mean there is a correction. June 2009 saw a major pullback of 9% and around 6.5% in September. However, there is an immediate need to correct the market by further 10%. It seems that any plunge in the market has been viewed as a major buying opportunity by people.

Again, you can’t say this is not possible. With interest rates as low as zero and no evidence mentioning further hike in future, this is very much possible.

The market has seen five days of volatility and the uncertainty seems to continue next week as well. However, it’s very early stage to panic because the 12-month trend mentions an intact upward surge.