It was another very rough week for the bulls, especially those who favor small cap and oil stocks. We had some gut wrenching drops in thinly traded stocks and commodity related big caps.

We finally found some support today and managed a good bounce on better than 2 to 1 positive breadth but fairly tame volume. It is a start to a better market but keep in mind that it is just a start. It would be unrealistic as well as risky to expect the market to recover in a straight line. The best entry points with the least amount of risk will not be found if your goal is to try to catch the exact bottom. The best entry points take time to develop, after the market has pulled back and found its footing. 

I see no advantage to being bullish before we have some pretty good positive action first. More often than not a market will have a series of failed bounces before it actually bottoms. My motto to calling market bottoms is “better later than early.”  I’m much more concerned about buying when we have the best odds rather than being the hero who times the exact turn.  Timing turns is great for the ego but it’s a high risk way to trade. 

If you’ve been having a rough time of it lately you are not alone no matter what all the geniuses on the Yahoo message boards may be saying. The key is to not be over anxious about recouping your losses. Don’t try to go for the homerun. Try to make slow and steady progress day after day and before you know it your accounts will be back at new highs. 

Enjoy the weekend. I’ll see you on Monday.  

RevShark