Perhaps today is the day for some to "make some money back", for many others, they are still assessing the consequence of yesterday's carnage.   What's done is done and as far as we are concerned, "it's in the books"!    There's really no point over discussing or analyzing what happened yesterday so we won't get into that.  You probably heard or seen every explanation under the sun in the past 24hrs.  What's more important at issue here is what's going to happen next.   Whether you suffered a lot, or a little or none at all from yesterday's crash, all want to know how the trading environment is going to look like next little while.   We think it'd be volatile, very volatile at least the next little while with the bias is to the downside.    Bounces are nothing more than bounces and we are certainly seeing some bounces today. Today had to happen, if it didn't we'd be in BIG trouble if the market didn't bounce after such a exaggerated move to the downside.   It doesn't mean, however, that we are right back into a frenzy buying mode and in fact we should be the opposite and be distrustful of any upside movement.   Sure, you can probably find some intraday trading opportunities here and there to keep busy and make some change but we still have to be mindful of the overall scope of this market.     Trading intraday within this kind of market environment is difficult, regardless the kind of experienced trader you are.  Despite many bounces, some like HURC, SILC etc moved further to the downside.  This is what we fear in trying to find what looks like an easy reversal play, yet it goes down further the day after the carnage.   As you all know, we DJIM are always looking to make money off "easy trades".   That means finding favourable opportunities in a favourable market environment.       Does this mean that we are going to be going into hiding for long while?   Are you crazy?  This is still in February and market doesn't seem to be in a "done" mode.     We think this is just correction activity that's just long overdue despite the spectacular point decline from just one day.   Is it enough of a correction, we'll see soon enough.   Come to think of it, yesterday's point decline is nothing more than a 4 or 5 days of straight decline, which is not uncommon and we have seen many times in the past.     One thing we have to point out though, in any kind of correction, we are never the ones to go after the bottom.     There will never be an exact bottom point but it's rather a process.    When breadth is improving and when you find more and more tradable opportunities on your screen, chances are, bottom was already formed.

Again, think of this market as an individual stock but of course with a lesser degree of volatility.    What we are doing here is taking a wait and see attitude, constantly check for new 52 week highs.    If there are stocks that are making new highs, it means those are the stocks that can weather the correction and chances are a lot of momentum funds will be gunning for those to make up the performance.   We would also be right there to take advantage if a certain group of stocks or sector shines out.  Today, we got an example of what we'll look for...the buyout of a steel stock (STTX) and the secondary plays that started to move.

This is definitely a good time to cool down and go through your strategy a bit.   Has it worked so far and has it worked well with DJIM stocks.   If not, then look for clues where needs to be improved and make a mental note of it.     Trading is an ongoing learning experience and one day of bad market does not wash away all of the participants.    In most likely scenario, most people won't even be talking about yesterday's crash a month from now.    Finally, yesterday was a long overdue and talked corrective activity, an over reaction caused the ensuing meltdown.  A panic attack of sorts.  Not one event or a single trigger caused such a freak show.  The market showed what it needed to show today and that is there is plenty of bottom fishes that want to buy this market and put in a bottom of support.  Do remember, the fear mongers will try their best to exploit the anxiety most will feel after yesterday...so expect volatility.  Chances are those that didn't bail fast enough yesterday, will be the first out next time if any sign of further downside correction activity is felt.