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There was something too good to be true about Thursday's seeming breakout above the 50 day moving average. Thus, it is not a tremendous surprise that investors took profits on Friday with the S&P closing back under this important level.
Not helping matters was another weak economic report. This time in the form of the PMI Manufacturing index, which is down from 52.1 to 51.4. Even worse, the new orders component is at the lowest rate of the year.
This report joins a flurry of other recent announcements which show a decelerating economy. Interestingly, the benefit of this weak economic data is what it is doing in other places like producing lower bond rates and weakening the dollar. Both of those are actually pluses for the stock market.
Net-net I see a long term bull market still in place...but do expect more volatility and downside in the near term. So continue to look for dips back down to recent lows of 2120, or lower, as good spots to put some cash back to work in stocks.
Best,
Steve Reitmeister
Executive Vice President, Zacks Investment Research
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There was something too good to be true about Thursday's seeming breakout above the 50 day moving average. Thus, it is not a tremendous surprise that investors took profits on Friday with the S&P closing back under this important level. 
