Market outlook: Now what?

The stock market pulled back today. The Dow closed at 8,149, the Nasdaq at 1,507 and the S&P 500 at 845. And while the pullback seemed strong, the volume was lower than yesterday's volume. The big question for me is, Now what? I still own all my shares of the ETF's TNA and SSO and did not sell any. If the market drops back down to the 7,900 level I will add more shares. If it goes back up I will wait to sell when the market is close to the upper bands of the range. For the Dow that would be 7,300 to 9,300 and for the S&P 500 that would be from 750 to 950.

It seems that from the run-up to the Stimulus package being approved yesterday by the House of Representatives, the market was rising. But as soon as the vote was in where not one Republican voted for the Bill, the market started to pullback. Much of the discourse by Republican leaders is that the package is not going to stimulate the economy, which has sewn doubts about its effectiveness in the general public. As I said in an earlier post, was it necessary to get a compromise in this package between Republicans and Democrats in a watered down version of a Bill that both sides would lose something or should the Democrats go it alone. It seems that the republicans left in Congress have decided that they have a better chance at personal survival by opposing the Bill, than by supporting it. It's the old Washington at work. Democrats too have used their recent gains at the polls for guaranteeing that the old politics is played out. Nancy Pellosi is at the heart of this old politic on the Democratic side. President Obama has his hands full here.