Obama "Bounce": Why It's Not Bouncing

Those of you who thought the "Obama bounce" would triumph over "the economy" or "profit taking" today must be rather unhappy.

The average stock is down about 2.5 percent midday, with particularly weakness in some commodity and energy names. ArcelorMittal's announcement they would be cutting steel production is weighing on steel, iron ore, and coal companies.

But it doesn't stop there: financials and pharma have been weak, and recently tech stocks have also moved down. House Speaker Nancy Pelosi, not surprisingly, threw her support behind an economic stimulus bill midday as well.

Stocks have had a nice run in the past 7 trading days—the S&P is up about 15 percent from its lows last week. Many beaten up groups like REITs, retail, restaurants and hotels have had nice moves up.

What the market is saying here is, not so fast. There is a ceiling on a market rally due to the horrible economic numbers. Most traders believe it is highly unlikely the S&P will close the year out near 1,200. The majority think we are likely to be slightly higher from current levels.

    • Private Sector Cuts Jobs; Planned Layoffs Jump

As for the Obama bounce: most stocks that were supposed to benefit from his election (solar, hospitals, infrastructure) are also down today, in many cases just as much as stocks that were supposed to be hurt by his election (defense, pharma, big oil, tobacco).

New from CNBC.com:

- The Dow 30 at a Glance

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