We have a tough week ahead. Last week was tough too, no one would have expected it. Goldman Sachs delivered great earnings, but still was killed by the market because President’s sweeping new plans. On top of it, there was a doubt about whether Fed Chairman Bernanke will be nominated for the second term. There were lots of concerns about China tightening banks’ lending rules.

The broad-based selloff pushed Dow Jones Industrial Average down 552.45 points during the past three trading days. Friday’s decline left the Dow still up 55% from its low hit on March 9 last year, but Dow is down for the current year. It appears that January effect is fading away. Dow Jones suffered its third consecutive triple-digit decline, down 216.90, to 10172.98

In the week ahead, Senate will probably vote on Bernanke’s confirmation. If he is not confirmed for second term, the market is going to fall bad. We will get data about new home sales, initial jobless claims and Chicago PMI on Friday.

As always trade wisely. Know your risk tolerance and keep those stop-losses tight.