- New Trades -

Editor's Note:

(April 13, 2014)

It looks pretty ugly out there. I have looked at close to 2,000 stocks this weekend. The S&P 500 is only down -3.9% from its all-time high a couple of weeks ago yet plenty of stocks are already in their own private bear market.

The NASDAQ composite and the small cap Russell 2000 index continue to lead the market lower. Both indices are off about -8% from their highs a few weeks ago. A normal correction is about -10% (give or take a couple of percent) so we're almost there. Yet the Dow Industrials and the S&P 500 index either need to catch up or the NASDAQ and the Russell are going to see a lot more pain before this pullback is over.

On a short-term basis the path of least resistance seems to be down. Sure, we could see stocks bounce again, just like last week, with a sharp two-day surge higher. Yet the next rebound probably rolls over again.

Now that the up trend for the NASDAQ and the Russell 2000 has been broken it could take a few weeks before stocks find real support again.

I do see the market pullback as an opportunity for us. Big pullbacks can generate great entry points but we do not want to jump in too soon. We do not have to catch the absolute bottom to be successful investors.

I am not adding any new trades tonight. Let the dust settle and let's re-evaluate again next week.