Over the last couple days the market has sold off. Weak manufacturing data out of China and flight from emerging markets spilled over into European and US markets. We are seeing short term concern as evidenced by the rise in the volatility index and money being funneled into safe havens like U.S. Treasuries. We believe the primary driver is the fear of slowing growth which is why emerging markets seem to be leading the decline.

Corporate earnings announcements have generally been good but are being ignored for the time being. We expect any consolidation to be relatively short in duration and shallow as overall fundamentals remain sound. Earnings are still reasonably valued, interest rates are low and there is still plenty room for improvement in overall investor sentiment.

Backing and filling is a normal expectation in the context of a long term bull market. It is actually healthy for the market in order to create a better foundation to sustain the next leg up. We remain bullish in the intermediate and longer term time frames and view the current consolidation as opportunity rather than a reason to panic.