As you may know, we often consider the reaction to news events more important than the news itself. This will likely be the case with the Congressional battle over Healthcare. The House passed a bill late Sunday night, and the market futures have been down a varying degree since then.
With this legislative process now basically a "done deal" and the bill itself fairly watered-down compared to original proposals, it will be interesting to see the market reaction in the coming days. Will we have a typical "sell the rumor" reaction, where the market is down this morning but then rallies back? Or was Friday's move lower and today's pre-open weakness a signal that this overbought market is ready to pull back more substantially? My market signals have been showing more of the latter, but let's let the market tell us in the coming days.
With this legislative process now basically a "done deal" and the bill itself fairly watered-down compared to original proposals, it will be interesting to see the market reaction in the coming days. Will we have a typical "sell the rumor" reaction, where the market is down this morning but then rallies back? Or was Friday's move lower and today's pre-open weakness a signal that this overbought market is ready to pull back more substantially? My market signals have been showing more of the latter, but let's let the market tell us in the coming days.