Will Rogers once quipped, “You can all sleep better tonight folks, Congress has adjourned for the summer.” Well, Congress is not adjourned but it is still superbly managing to not get anything done. And that seems to be pretty OK with the Markets. The originally much-ballyhooed healthcare reform proposals arrived SOA (that’s Sick on Arrival and not looking all that good). With the Dow down midday nearly 80 points (pretty well offsetting yesterday’s 84 point climb), the disappointment is not with the healthcare implosion necessarily (at least YET), but with the accompanying diminishing promise of tax reform. It is quite reminiscent of the saying, For each and every complex problem there are three simple solutions that will only make things worse. That is what Congress – and the American people, taxpayers, insurers, unemployed, underemployed, healthy, and elderly – are witnessing. It is philosophical as well as economic and that is what makes it so hard to find something workable.
The Market Light is going Green from last’s week’s Yellow (Cautious but Improving). All-time highs are near-at-hand. Though the Dow is down some today, the S&P is currently flat, and the NASDAQ Composite is up for the eighth straight day.
Top relative strength sectors this past week include Rare Earth Strategic Metals (REMX), Mexico (EWW), Metals and Mining (XME), Coal (KOL), and China/India (FNI). One the weaker side, Natural Gas (UNG), Retail (XRT), Telecommunications (IYZ), Silver (SLV), and Oil & Gas Services (XES).
The Technical Tea Leaves are all-but-silent on the matter: No rules have fired. This indicates that the prior signal and the current market will continue in this direction until the next signal is issued …