10% CORRECTION IN SP500?

Might be, we never know. So far, we have seen closely 5% tumble since 20th September. Currently, nobody can be sure about the market rebounces or falling further down, but don’t be surprised if the correction keeps going on further.

We haven’t had a correction in such a long, long time since 2011 we haven’t seen a double digit correction for more than 36 months and normally it needs to come each year. The last big decline with 19.4% ended on October 3rd, 2011. So if the correction comes don’t be scared that is part of this business. Honestly I think the correction is good for the market because:

• You can find good bargain stocks and you could be able to buy the market at lower levels
• Many good buying opportunity occur
• That is healthy for the longer term bullish run and refreshing the bulls
• Gives new investors an entry point into the market
• Reducing a bit the P/E ratio

To take profit from advantages of the double digit correction you have to keep you cash dry. You have to have free capital to buy the dips right after the correction, so never use all your capital in the trading, your free and uninvested capital is also an asset of your portfolio.

Technically on the SP500 chart the resistance level is still at 1.960, until that level we should wait and watch.

The BFM Assets Team.