After the huge jump in the indices on Monday, some pull back is to be expected, as short-term flippers and those who are looking to reposition exert selling pressure. The important thing is that the pullback not go too far or be too intense. We want to see some dip buying kick in fairly quickly as evidence that there are underlying buyers who are confident enough to put cash to work.
The selling today went further than I'd like to see. The point loss was big enough to call into question the idea that we have some decent underlying support. The buyers showed little conviction and were overwhelmed with what many are calling "forced liquidations." I don't know to what degree the selling is being "forced," but it certainly is at extreme levels, and trying to anticipate when it's going to end is a good way to get crushed.
As I've written often, my style is to not try to battle the market trend. There can be no doubt what that trend is, and unlike many others, I'm not going to try to guess when things will turn. I'll keep looking for signs, but until we get some better action that lasts, I'm not going to be doing much buying. Keep that cash safe, and you'll be in great shape down the road.