More Nasty Action

Over the last 2 days, I have been stopped out of several positions, in addition to adding some ETF index shorts. This has served to significantly reduce my net long exposure to the market.

Yesterday was a large range downside day, with increasing volume. Today is looking like it could be another distribution day. Stocks are being sold hard, and as such the major indexes are breaking down further.

Sentiment indicators, like the put/call ratio, are spiking so there is some fear building. But I think the most likely pattern to play out from here is for the market to bounce at some point (maybe coinciding with quarter-end), and then come back down to test the lows. If bearish sentiment spikes into that re-test, and the market doesn't break down further, that scenario often offers a good buying opportunity.

This process can take weeks, so I don't want to get too far ahead of myself. But I'm just laying out my thought process at this juncture, fwiw.