Now that Ben Bernanke's testimony has concluded, there's better bounce action. But it hasn't been very impressive given the intensity of yesterday's selling. Markets that come down that fast and hard usually rebound strongly for at least a little while, but the bounce buyers have been hesitant.
The good news is that the market really needed the correction of the past week to get better trading setups. I'm not confident that this pullback is over, but I'm working on a shopping list and I will be looking for buys.
When you look for buys in this type of environment, leave plenty of room to add more and be sure to have an exit plan in case a stock doesn't develop how you hope. You will pay a very heavy price if you just keep averaging down within a downtrend. Make sure you have a plan to cut losses if things don't work.
I'm looking to add to positions in LinkedIn (LNKD) and Netflix (NFLX) and a couple of small-caps on my shopping list are Goldfield (GV) and Security National Financial (SNFCA).
It looks like the buyers are gaining momentum and if the early highs are taken out it should draw in more folks who don't want to miss a bounce.
