Yesterday the Dow was down 178, today 107. Tuesday was a big volume decline, and after that I thought we only needed another sell off to put us into a correction. Today we got it, but there were some bright signs with oil stocks and a couple other leaders going up. I don’t know if this will lead to a correction, but it looks like it.
The problem we face is the market has been oversold since September. Its almost March. We had a slight correction in November which turned out to be a bluff. Other than that we’ve been riding high.
The concern is a lot of stocks have been on extensive runs without corrections. So there has been no reason to sell even though there may have been investors who would have — if the stock stopped going up. Now we could get 6 months worth of profit taking.
Even the Dow hasn’t had much of a correction. It might hold up better than the NASDAQ because Blue Chips are in this year.
Bottom Line
I would seek to reduce margin. Consider takings some profits in top top-notch stocks that have been so hot since last year (don’t sell energy stocks). Get your wish list ready, we may have opportunities to buy some of the best stocks on a discount.
