The indices have bounced off the intraday lows but when a bounce doesn't occur quickly after the open the danger of a poor close is higher. This is some of the worst selling the market has seen since June and there is likely to be quite a few longs looking to escape into strength. I expect that the indices are not going to go back up very quickly.
This selling is not about Turkey. This is a market that has been struggling for a while although the indices have covered it to a great extent. What we are seeing is that the technical underpinnings are falling. China, emerging markets and all the other negatives that have been bandied about are convenient justifications. The market has wanted to sell-off for a while and finally it is doing it.
The positive spin on this is that it is healthy to finally get the 'resets' in many stocks that have become extended and have needed a shake up. This is what the market needs for better conditions into the end of the year.
I am using the weakness today for some bottom fishing. I mentioned Sarepta (SRPT) yesterday as a name I am buying on weakness. A couple others are Turtle Beach (HEAR) and Bloom Energy (BE) . There are quite a few others that I'd like to build like Intelsat (I) but there will be plenty of time to add as this corrective action plays out.
Right now the main focus should be on defense but now is also the time to identify those stocks that you think will perform best into the end of the year. The poor action today is just one step in the development of the setups that will pay off later. Prepare for the worst but stay positive.