I do not see much point in pulling my hair out trying to figure out if we see a quick shakeout and undercut of recent 1430 lows on the S&P 500, or instead have already bottomed. The bigger opportunities over the next few months are likely to be seen in the prospective sector rotations that continue to firm up.
Those rotations are still works in progress but, for example, while I saw plenty of traders become flustered with the initial fade by the market this morning, the FXI, ETF for China, is up over 1% at the time of this writing. As I noted on my video recap last evening, in sharp market corrections we have seen a vicious “risk off’ trade, where sectors like emerging markets would get sold hard along with the Nasdaq.
This time around, the picture is more nebulous within the context of an overall uptrend and the S&P operating above the low-1420′s major breakout point. While market corrections are usually sloppy, making a few minor adjustments here and there in your portfolio should not distract from the larger technical picture intact.
Note the FXI chart near breakout from a major symmetrical triangle, as noted earlier this week.