Market Monitor

• There is no fear in the market, so we had one of those mildly wild day, where after things becoming a bit ugly early on and continuing ugly till late afternoon, the dip buyers were back at it again and the final numbers don't look bad. With 76 stocks up 4% or more and momo names doing well, this is just a blip in the larger scheme of things. A correction in bull market. Shaking out weak hands. Unless this develops in to something more severe, this is just another correction.

• As to where we are after the correction the Dow and S&P will be down just around 5% down and Russell is around 10% down.

• I am sure it did not feel that way while it happened. Those who were positioned wrong and over leveraged must have taken large losses. But that is what this game is about. Wall Street is a mechanism to transfer money from less skilled speculators and investors to the more skilled one.
  
• Now we are set up for a reflex rally and going by the markets last few years record it might be a rally which gives no chance to enter again. More realistically, we will have few weeks to months of high uncertainty .
• Corrections consist of two phases, rapid selling and slow methodical selling. The rapid selling phase is what we saw till now. Once this is over certain sectors and stocks which have topped out, start their slow methodical move down. While this is happening, another set of stock start their slow journey to take on new leadership. So I will be actively looking for new emerging leadership themes over next few weeks.