Keep This In Mind

Yesterday's action will surely bring out the headline seekers.  Most major indices lost between 2-3% by the time we rolled into the weekend.  My guess, and it's just a guess is that we'll at a minimum have one more bad day on Monday or at least start lower.   The markets had built up a bit of froth and this is as good a way as any to let loose of some of that steam.  Yesterday's trading has actually taken us from a short-term overbought condition to oversold so that could mitigate some of the damage next week.

The important thing to watch is how markets react when the inevitable counter rally kicks in.  A market that either can't quite reach those old highs or makes it back up there only to not have the juice to make carry itself higher is possibly trying to change it's trend.  We'll just have to see.  

One last thing.  This decline so far has only taken us back to about where we traded in Mid-January.

Back Monday.  We'll be serializing our latest investment letter next week.