Despite the bleak debt-ceiling negotiations conveyed by President Obama last night, the market held up fairly well today with technology leading. Again the close was weak and breadth was much poorer than the indices indicated for the second day in a row. The breadth deterioration has to be a concern for the bulls. While the SPY held ok, the S&P equal weigh index had being divergent in the recent rally as money continues to flow into select large cap stocks.
Amazon’s earning report is solid and attracting buyers, but the QQQ did not show any enthusiasm over the report after hour. Volume was light but the trading action shows very little panic even though the VIX is threatening to uptrend. We also have the Q2 GDP report on Friday (perhaps confirming a slowing economy) and couple that with a debt ceiling gridlock may rejuvenate the bears.