The very poor market action continues but it may be a good thing that we aren't seeing a typical Monday morning bounce. What we want to see is a very high level of disgust that causes many to throw in the towel.
Typically, bottoms don't come on fear. There are a few exceptions like the crash in 1987, however it is far more typical for a bottom to occur with a whimper and not a bang. Back in 2008 the bottom occurred on March 17. There was nothing remarkable about the action on that day other than an intraday reversal. Volume wasn't unusual and there wasn't a big move until the next day which that stuck.
The important point here is that don't expect to see a bottom in this market to come on a panic. It will likely occur without much fanfare. The best tip-off of a low will be some strength that finally holds.
I continue to do very little. Long positions simply aren't working and it is premature to do much building of long positions. There are a few junk names attracting speculation but they are not seeing the sort of chasing that usually occurs in better markets.
It is very important to recognize right now that it doesn't matter that you own 'good' stocks. This sort of market does not distinguish between those that deserve to be lower and those that don't. Everything is being sold regardless of merit but that is what will eventually create great opportunities. We just have to wait for market conditions to shift.
Fiat Chrysler (FCAU) is one of the few stocks that is up today after selling off its automotive components business to KKR (KKR) . The stock is trading up about 3.5% on the news but this not a stock that looks like it has formed a solid low. Not only is the automotive sector struggling with worries about a cyclical shift but the charts of all the stocks in the group are quite poor. If you are interested in a name like FCAU it is best to track it for a while before you buy it. This stock is not going to run away from you in the near term.
One stock I'm watching today is my Stock of the Week, NII Holdings (NIHD) . They operate Nextel wireless in Brazil and may be a potential takeover target as Brazil is said to be changing their restrictive rules on ownership of spectrum.
