I wrote a piece around 8:30 AM late last week about the potential for a gap down open creating emotion; at the time the major indexes were down by about 0.7%. Of course in the ensuing 30-40 minutes "they" bought 'em, taking the indexes up by about half a percent which offset the chance for a potential washout morning. Today, I waited 40 minutes later to see if that would happen again before writing a post – instead it seems losses are holding as the S&P 500 looks to open near the low end of the range from last week. There has been a strange lack of emotion during this selloff which is now almost a full two months old. That is actually quite a long correction in terms of duration but the magnitude has not been supreme at least for the S&P 500 (the NASDAQ is going to be at a roughly 10% correction this morning at the open). Definitely a drip drip drip type of selloff rather than shock and awe. What many would like to see for a tradeable bounce is a big down open, emotional in nature, followed by a turnaround late in the day – but with so many mornings the past few months being flat to up that condition rarely has a chance to play out. We'll see if we get closer to that emotion in the market today.
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/index.php/the-fund/holdings