From the start this session was a Friday test post-new highs. The indices, despite a plethora of earnings beats from big names -- though beats that were not spectacular -- are sluggish. They are testing now, and that is not necessarily a bad thing as it clears the decks for the coming week. A pullback in hand to test the breaks.
Even so, they bounced off early morning lows into midday. The past hour they are fading again but still well off the session lows. That may not last much longer, however, as the downside is accelerating a bit.
SP500 -3.08, -0.13%
NASDAQ -9.64, -0.15%
DJ30 -51.91, -0.24%
SP400 -0.33%
RUTX -0.40%
SOX -0.89%
The news flow is rather drab. More, as always, intrigue around the White House and who is investigating who (whom?). Congress is still functioning as if it woke up in a pitch black subterranean cavern with no clue where it is, why it is there, or what it is supposed to do. With that backdrop does anyone seriously think anything will get accomplished on healthcare, taxes, or anything else? Hey, it can happen, but with McCain out of action but 'vowing to return,' the GOP is down a vote when it needs 10.
Thus this is likely not a major selloff, just a lack of bids on a late summer Friday with a lot of people on vacation. Of course any downside in this artificial, steroidal, trumped up (get it?) market is viewed as a crisis. It is not.
Jon Johnson, Chief Market Strategist
InvestmentHouse.com
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