Volatility and More Volatility

Market weakness continued today with no specific catalyst.  U.S. economic news has generally been good and improving over the last several days.  However, headlines in Europe regarding their credit crisis and the growing yields on specific country bonds have created an environment of continued unease and uncertainty.  That could change at any time as the European situation is very fluid and positive headlines could move the market sharply higher.  Similarly, more negative news could quickly turn this market very ugly.  As we have discussed a number of times, basing investment decisions on the whims and conversations of politicians is a virtual coin flip.  On the U.S. front, recent news that the Congressional super committee tasked with reducing our country's deficit may have trouble (surprise) reaching a consensus provided additional nervousness over the last few days.  One of our equity positions was stopped out today, so we have liquidated it and moved to a little more defensive posture until the current weakness plays out.  Technically, the S&P broke a key level of support today so the bulls will have to make a stand soon.  We continue to believe that the market will rally into year end but it may start from lower levels than the market close today.  Time will tell and we are watching things closely.