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Many uncertainties developed this past week sending stocks sharply lower. Some were justified and some are most likely not. In fact, President Obama created some of his own on his own! Think about it, with the election of Chris Brown to replace Ted Kennedy’s seat health care reform is now even more uncertain than ever, the filibuster proof majority has been eliminated and bank regulation/reform is now in question. Add to this the bipartisan wrangling over the re-appointment of Federal Reserve Chairman BenBernanke, a sluggish earnings season, China tightening monetary policy and the migration from cyclical stimulus to secular reform and you have a recipe for a sell off. Oh, we forgot the increasing unemployment claims.
At this time we believe that it is only profit taking. However, investors seem likely to give this sell-off a short leash.