Hopeful bulls are stressing that the economy isn't that bad, employment is still very strong and inflation may already be cooling, but the market is no rush to embrace that optimism.
A negative pre-announcement from Snap Inc. (SNAP) provided further fuel for the argument that consumers are pulling back and that the danger of a recession is growing. While there has been talk about a potential recession for a while, it has not been discounted by the market to a degree that an oversold rally can develop. There have been a few tries at a bounce, but they have been overwhelmed each time by a new wave of selling.
The desire to try to catch a bounce in the market is understandable. These countertrend bounces are often very big and very fast and can be very profitable if timed right. The key is to be very clear on time frames and not allow a failed attempt at catching a bounce to turn into an investment.
If you are a longer-term investor who is looking to build some positions as this bear market develops further, my best advice is to try not to be sucked into the bounce game. It is better to be late than early when building longer-term positions because there is less risk if you buy charts with some support rather than trying to buy stocks in free fall. Stop-out points are obvious if you have some sort of strength already.
The business media and many pundits are constantly promoting the idea of catching the exact market turn. Those who have played that game the last few weeks have suffered greatly if they did not sell positions in a matter of hours.
The best approach to this market right now is to do very little. Stay patient while charts develop, and don't grow anxious over the possibility that you may not buy the exact low. Have a shopping list ready and plenty of cash on hand. When conditions change, you will do extremely well. Don't let impatience push you to act too soon.
We have a soft open on the way as the market looks ahead to Fed minutes this afternoon. Any hint at a pause in rate hikes will excite the market, but at this point the minutes are old news.