Pullback Getting Long in the Tooth
Stocks are set to open sharply lower today as the media and pundits assign blame to the GOP’s failed healthcare bill. I am not sure I really buy that notion as the bill was confirmed as dead during trading hours on Friday, but really, stocks began pulling back four weeks ago and accelerated lower as healthcare reform seemed less and less likely. Remember, it’s not the actual news, but rather how markets react.
As I have been writing about this pullback for some time, it’s just about starting to become long in the tooth if my assessment is correct and it’s just a modest bout of weakness in an ongoing bull market. The major stock market indices should begin to see some stabilization very soon. Using the Dow Industrials, 20,400 to 20,200 should offer a strong cushion to support the bulls. To repeat what I keep writing over and over and over. The bull market is not over. Weakness should be bought. Buy the dip until proven otherwise.
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