In my previous blog I mentioned that I was looking for a market correction around 12000. We did not have a correction at 12000 but we went ahead to around 12400 before make a dive and recent earthquake in Japan has left the down below 12000. If you take a look at a six month picture of the DOW we see a similar pattern in the last market correction in Novemeber 2010 when the DOW corrected from 11400 to 11000.
Should you be buying in this market dip?
Long term investors may look at this as a buying opportunity and short term traders may well think of looking to get in for few days. With previous market corrections some aggressive strategies that did well were finding most beaten down stocks in the current market correction.
Recently I have been following James Stewart from Smart Money. In his latest article he suggest these growth stocks when market makes a 10% correction which means a 2541 on the NASDAQ.
Market bears look at the volatility and uncertainty over impact of the Japan earthquake and predict that markets might go down further.
Last few days have seen some selling at high volumes and volatility which means there might be further downside potential. What are your thoughts? Will you be buying in at these levels?
Fibonacci series for this last bull run from 11000 to 12400 for the DOW returns 11544 as the 61.8% mark at which some support could be seen with the DOW bumping on these levels.
As for long investing I would add positions into my long term portfolio.