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Don't worry friends. The bull market is still firmly in place. Tuesday's selloff is just another phase of the consolidation under 2400 that started March 1st. During these consolidations we see investors rotate money from group to group on some days. And on other days they take excess profits away from the recent big winners.
Simply stated, the smaller, riskier, growthier, cyclicalier, Trumpier and Risk On'ier the stock, the more it went down Tuesday. Those with less of those attributes did better. The good news is that during the next Risk On session you will likely see all of Tuesday's biggest losers become the biggest winners (and vice versa).
Reity, how far would the market have to go down that you start worrying that this is more than just part of the consolidation?
The 50 day moving average provides support at 2326. Given where we are now (2344) that level will likely be tested and that may be as far as we go. However, I have a sense that a test of 2300 may be in the works just to shake off recent complacency. Breaking below that mark in a meaningful way would be cause for more alarm and more defensive action in our portfolios.
In general, I see these dips as excellent buying opportunities. And if already fully invested, then just stay the course. Your odds of perfectly timing exit and re-entry are very low.
Best,
Steve Reitmeister
Executive Vice President, Zacks Investment Research
Zacks has developed an active, computer-driven formula that removes human emotion and bias from every buy/sell decision. It distills 10 high-potency stocks every Monday morning.
In fact, last year this system cranked out flurries of gains such as +35.2%, +22.1%, +25.8%, and +19.0% in as little as 1 week.
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Don't worry friends. The bull market is still firmly in place. Tuesday's selloff is just another phase of the consolidation under 2400 that started March 1st. During these consolidations we see investors rotate money from group to group on some days. And on other days they take excess profits away from the recent big winners.
