Top Line: Another great buying opportunity presented itself. There is possibly some more downside, not much, and that would be a great time to commit some more funds if you have any left.
Monday's market gave way very early and the ended up losing some 250 points on the day. The market is pulling back to get ready for a big move up. This pullback is right in line with a normal selloff after a big runup. These pullbacks are for one thing and that is to scare the bulls into thinking that the bear is back and is going to run them over.
The stock market will try to confuse as many people as possible. If you bought on Friday, today was a day to get scared and sell. Tomorrow may be another day to buy. What's the right thing to do? A rally is at hand and pullbacks should be bought. Upside is coming.
Like we mentioned at the top, a possible further decline may occur but that should be bought. Remember, we want to sell Strength but Not Yet. Of course, if you are trading you can sell into strength and then buy back during pullbacks. This may not work on the next rally, which looks like it will be an Elliott Wave 3, which is normally the longest and strongest move in a pattern. If wave 1 ended last week, the Dow gained over 1400 points and that would make the upcoming wave 3 higher than that. We guess it will be a move of about 2000 points taking us very near 10K. Relax and enjoy.