Dow’s down 165 as I type. All the headlines blame Congress’s failure to replace the Affordable Care Act. The market dipping for that particular reason is curious, given this S&P 500 chart that begins the day the ACA was enacted:    click any chart to enlarge…

Clearly — while I don’t know that it’s been good for the market (save no doubt for the stocks of select beneficiaries) — it certainly hasn’t altered its longer-term trajectory.

Of course it’s more about concerns over President Trump’s ability to get enacted the stuff traders and investors are really after. That is, tax and regulatory reform. Although the above chart reflects the market’s performance under the existing tax and regulatory regime. And the recently improved hard economic data (real numbers, as opposed to sentiment) are occurring pre any of the econ/market-friendly items on the President’s agenda. Hmm…

The stock market is a funny place. It could’ve just as easily traded lower had the Republican plan passed. Crazy? Take another look at the chart above. Couldn’t traders turn wary over the prospects for the repeal of something that existed during such a profitable run?

One thing I can tell you for sure, the short-term setup had been getting a little sketchy, and when the market’s in the mood to pull back it’ll do so for whatever reason it can find. 

Here’s a one-month chart of the S&P 500 with two short-term moving averages layered on. When the red (the 5-day moving average) begins converging from above (diverging from below) with the yellow (the 10-day) that tells us that near-term momentum is waning:

Yep, even when optimism was high over what’s to come from Washington, the market was beginning to take a break.

So, is this legitimate short-term signal something we should give long-term credence to? Well, here’s the past 12 months:

So, no.

I guess if we’re looking for long-term credence we should check a long-term trend indicator. Here’s the chart with the 200-day moving average (blue) added:

Nothing here to see folks, move along, go about your business. We’ll keep you updated :)…