The good news is that we aren't seeing much downside follow-through so far. The bad news is that we aren't bouncing much, either.
Market players aren't anxious to rush in and snap up all the great bargains created by yesterday's big swoon, and who can blame them given the recent volatility? The problem with a market that acts this way is that it undermines trust. Valuation is irrelevant when 90% of stocks are down on a day like Thursday. Why even bother with stock picking when all that matters is the latest headline about the economy or European debt?
Despite the gloominess, I'm increasingly optimistic that good trading is ahead. The market will start to sort out the good stocks from the bad and when that happens, astute stock pickers will be rewarded.
The key to success is to stay patient, have plenty of cash ready and to know what stocks you want to buy. If you are mentally prepared for the day when the market acts better, you will be able to move aggressively and profit tremendously.
The market looks weak and it is slipping in afternoon trading. I keep reminding myself that this won't last forever, and that we'll have a better market for having gone through all this, but it sure is tiresome.
Just remember to stay upbeat when the action looks dreary or downright negative.