What do you do in a market like this?
Stocks in the S&P 500 are down nearly 7% through the first three weeks of the year, yet midway through this week, things looked far more calamitous.
A plunge of some 565 Dow points midway through Wednesday trading rattled just about everyone who has money in the market. Then with about 90 minutes remaining in the volatile session, the Dow staged a robust comeback to close down “just” 249 points.
While some on Wall Street are saying that Wednesday’s meltdown, and subsequent gains on Thursday and Friday, might represent the “capitulation” selloff this market has been waiting on, that judgment is premature.
Certainly, the markets got way too oversold, way too fast…
After the first two weeks of the year, the Dow and S&P 500 were down more than 8% while the Nasdaq was down some 10%. All three major averages also descended into official correction territory, or 10% below their most-recent highs.
So, what to do?
You have two choices…