Brutal day for stocks. 840 stocks were down 4% plus on volume surge. This kind of selling days happen rarely.
Stocks that were holding up well so far have also been dented yesterday by a brutal selling phase. that likely indicate we might have more downside ahead in this round of correction.
As I said yesterday periodic bearish phases are good as it washes out excessive bullishness and creates condition for new crop of leaders to emerge.
The key to prospering and surviving in market is to play get defense and during conditions like these it becomes even more critical. If you have not lost money during this correction and grown your account then you are in good shape.
Many just end up giving up all their gains and get frustrated. Developing situational awareness is key skill to survive in his game. It allows you to quickly change your risk and approach depending on ever changing market conditions. You start to appreciate the importance of that skills as you trade more.
One of the ways to develop good situational awareness skill is by tracking breadth trends. Breadth can tell you when to press the pedal and when to ease off. It can warn you of impending trouble.
Follow Stockbee on Facebook