The press conference by FBI Director James Comey provided momentary drama, but the failure to recommend an indictment of presidential hopeful Hillary Clinton wasn't any surprise to the market. If the decision was otherwise, we'd likely see selling as it would have added great uncertainty to the election, but in this case the market's forecasting ability was pretty good. The cynics were proven right and that is what the market anticipated.
Overall, the action is slow and dreary. Breadth has not improved and is running worse than 3-to-1 negative. Given the frantic V-shaped move last week, this sort of action isn't a big surprise. In fact, it is healthy that the market pauses and consolidates, but you can bet that the bears will be overly anxious to proclaim that this weakness is signaling a major change in market character.
The key for the market right now is to show that it can hold key support levels. It can afford to give up some ground but that underlying support will be key. Even with the selling today it is still above the 50-day moving average and still in pretty good shape technically. As I noted in my previous post, there is decent stock-picking but the slowness of the action presents a challenge.
My Stock of the Week, Yirendai (YRD), has the sort of action I'm looking for in individual stocks, but it is very tough to find charts that aren't extended after last week's V-shaped action.