First a quick peek at the market impulse table:
Clearly, it’s a sea of red this morning. All impulse are down giving us an intermediate and a short-term down trend. As I write this, futures are up big already this morning indicating the market may not be interested in extended the losses into another day. A correction happens, now it’s time to find these nice entries. No need to buy today but certainly, it is time to start watching all those instruments that looked attractive but that where too expensive or near the upper channel line already.
Just for today, I will take a look at the market indicators charts.
Of the three I looked at, the Dow seems like the one who took the bigger beating. Of course, it had more to give back. For the Dow Industrial I see retracement back to late November 2006. I always find the other statistics kind of misleading. The news is after the shock factor of the Dow giving back 3% in one day. The last correction of that size was in 2003 sometime. But bottom line, price wise, the dow is still doing fine and it only gave back a couple months, not years of gains.
The NASDAQ also suffered damage with a heavy sell-off. But unlike the Dow, the price reached levels from late December of 2006.
The S&P 500 had a correction very similar to the NASDAQ. Take not though that as I write this, the futures are up already and the markets are set for a higher open. It does seem like investors are finding this to be a good entry point rather than a sign of the apocalypse.
What now? Well, I for one will not worry about it too much. I was stopped out on several orders and yes, some of the gains I was seeing on open orders Monday are now gone but the stop orders prevented me from losing more than I wanted to lose. It is always a good idea to stay on top of things in a day like yesterday but even if I was away from computer, stop-loss order would have sold what needed to be sold. I also like to keep my stops pretty tight. Yes it does mean I get stopped out sometimes and the price starts climbing right after. But I would rather suffer through 3 or 4 missed rallies than be locked in a market that’s taking my profit away.
I am hoping to have enough time to scan my charts today and find interesting buying opportunities.