Stocks had a bit of a correction today from what were clearly overextended levels.
The economic news this morning was weak, but tends to reinforce the view that The Recovery™ is highly selective, based on a monetary and fiscal policy that favors a relatively powerful few and fortunate individuals with exceptional wealth and connections.
That is not to say that there are not ways to do better than average with hard work and smart thinking. Rather, it is that there are artificial headwinds, and both subsidies and impediments for some, that work against a more general prosperity that have not yet been reformed out of the system.
I really don't see this correction gaining much momentum to the downside yet, although one has to keep an eye out for those exogenous events such as we are seeing in Iraq, Syria, and the Ukraine.
Barring such an event, a correction of the SP futures to 1900 would still not break the uptrend channel. It will let some of the air out of this market, which is plentiful, and provide the wash-rinse cycle that the pros use to extract their rents, in addition to HFT.
There is no sustainable recovery, just more talk about 'the new normal' and the need for patience to allow time and the market to work their cures, in an act of faith in those canards that brought us to where we are in the first place.
Have a pleasant evening.
