Do Not Overreact - Quick Market Note

I quickly wanted to warn my followers not to get too excited about a one-day sell-off. While it may be the beginning of something bigger (will elaborate in the last paragraph), one has to realize that we are still in a bull market. No portfolio manager is going to sell all of his/her positions here because some young desperate leader is waving his toy gun at America. North Korea will not spook investors until there is a full-fledged war with South (which is very unlikely). I think that at the end Obama will write Kim Jong-un a check to buy a new basketball hoop (which will be delivered by Dennis Rodman), and we will all live happily ever after. Today's sell-off was more about NFP adjustments due to lower-than-expected ADP and weaker employment component in Non-Mfg ISM, and not North Korea.

I have become intolerant to macho traders on TV who call days like today "the top of the bull market". Do they look at charts? Exactly why do they see this bull market topping for good right here? Do not bother asking them this question. They are too busy trading fast and talking out of both sides of their mouth even faster. Just because there is a possible triple top on SPX, does not mean we can't pull back and then take out the high again.

So we have a shorting opportunity and a pullback to buy. How deep can the sell-off be? I think that should the price not see a rebound back to yesterday's high and above (1574 on SPX) in the next few days, we may be looking at 1500 tested next or the following week. But I would rather concentrate on levels than call the timing of these dips and bounces. Please realize, once the price dips 4 to 5% from yesterday's high, there will be a serious bounce. 1574 x 96% = 1511 and 1574 x 95% = 1495. So 1500 will be defended, in my humble opinion. At that time some trendline, moving average, fibonacci retracement, and anything else that bulls decide to use as a support for buying en masse, will stop the decline. Do not get complacent, take what market gives you. Listen to your gut, and turn the stupid TV off...