After 3 days of selling the market finally stabilized today but did little to indicate that it was anything other than a brief pause within an emerging downtrend. Breadth was fairly good and we had some rebounds in small caps, oils and technology, but volume was very light. It seems as though many are still shell-shocked from the recent sell off and are not rushing to do much of anything.

Market participants should never expect the market to do a ‘V’ like reversal. The psychology of the market simply does not support such a move and that makes it a poor bet.

Here at Shark HQ we are working very hard, reviewing positions and updating our shopping list. The nice thing about a poor market like we had this past week is that it eventually leads to some very good trading opportunities in the near future.

If you haven’t taken some defensive action this past week, spend some time thinking about how to avoid further losses should the market prove to be uncooperative. The most important task in a weak market is to simply protect your capital.

TSP members who have followed our lead will want to watch very carefully the next several sessions. Once we start to find a base, we will begin discussing legging back into your funds. We don’t ever want to be overly anticipatory but unfortunately you can not move as quickly and need to do some pre-planning.

It is time to shut down the screens, forget the market for a while and enjoy the weekend.  I’ll see you on Monday.

RevShark