The bears were expecting it; they were waiting for it and almost lost patience. Is this the awaited correction? We’ve been hearing about it for the last 2 weeks and I remember selling TSE:GPX 2 weeks ago because trouble was brewing over Europe and the market was supposedly topping. It took that market a while to really top.
Frankly, I was expecting one of the PIIGS to take the stage, not only the Greek saga is not officially closed yet, Portugal was starting to get its name out there for the same claim to fame. Then last Friday, media outlets had a field day reporting how Goldman Sachs was charged by the SEC for alleged fraud in subprime mortgage investments that were secretly designed to fail.
Six days of rallying have ended in a triple digit loss on Friday. Was it the start of a losing streak? Regardless of how this matter ends with the US banks (more lawsuits, slap on the wrist or a successful defense by GS) alert your troops for those stocks you’ve been dying to buy at a discount.
I don’t like to go into predictions, so I don’t like to guess where the markets are going, I trade what I see. All those bears waiting for an opportunity to get in on the action might end up shaping it. If GS indeed triggered a correction, and we will have the confirmation this week starting by today, I will be deploying the troops methodically into stocks I have been following on my radar as my entry prices get hit. Volatility is the key to profiting from the markets and is an excellent contributor to beating the index.
Will you be ducking for cover or coming out to play?