Despite a late bounce that faded into the close, it was another poor day for the market. Breadth was better than 2-to-1 negative and there were plenty of big red bars. This has been the worst two days of selling so far this year.
Many market players, including myself, were hoping for some sort of dip but there hasn't been much interest in jumping on the lower prices. Buying weakness always sounds great when stocks are going up but when they correct, the fear of more downside keeps buyers on the sidelines.
I'm in no big rush to buy yet, but this action is necessary for better trading. The market had become too slow and complacent and needed a good kick to shake things up. The key now is for new setups to develop, and that is going to take a little more time.
I like the idea of buying dips, but that doesn't mean buying when things are still falling. If this is just a temporary pullback, we should see support levels kick in fast. Once we start seeing more upticks, I will look to add positions.
We have to give the bears a little more room to see what they can do. The best stocks will assert themselves, and that is what we will focus trading on.
Have a good evening. I'll see you tomorrow.