Pro Panel: Hidden Opportunity in the Selloff

Snap up some bargains as the market corrects

   

Put two traders in a room, and one might scream to sell while the other puts in orders to buy. So who’s right? Well, they both could be—depending on the indicators they’re looking at and the kind of trading you want to do.
We’ve rounded up our InvestorPlace advisors to give you their read of the market.

slingshot mild bull1 Pro Panel: Hidden Opportunity in the SelloffBuy the Bounces

John Jagerson and Wade Hansen, Slingshot Trader

Despite a couple recent down days, a true bear market is still probably far away. We believe that the most we can anticipate is a true secondary trend like we experienced in the second and fourth quarters last year. Even though the S&P 500 broke through 1600, it does not yet qualify as a bear market. Traders should be anxious to consider bullish positions on any bounces. Support at 1550 and 1470 are likely to be formidable, and bounces at either level could easily lead to new highs.

markman bull Pro Panel: Hidden Opportunity in the SelloffPanic Selloff=Buying Opportunity

Jon Markman, Trader’s Advantage and CounterPoint Options

So far the sell-off looks like a normal, garden-variety, run-of-the-mill multi-week correction. It seems bad because we have not suffered through one of these all year, but normally there would have been at least one 5% correction in the first half of the year. So far, the current pullback is not even that much, amounting to more like 4.5% from the mid-May high to the present.

Without trying to sound like Polyanna, I suspect that both bonds and stocks will be higher later this summer — and quite possibly much higher — as investors turn around and decide that improved growth is good for equities and bonds, so long as inflation remains subdued.

trester mild bull Pro Panel: Hidden Opportunity in the SelloffNeutral to Bullish

Ken Trester, Maximum Options

Stocks got clobbered Thursday as rumors of rising interest rates continued to swirl. Our indicators are giving neutral to bullish readings, a downgrade from last week’s bullish to neutral. But similar to last week, the bullishness aspect of the readings has an uneasy feel about it, as is usually the case when volatility increases. All too often in the recent past we have seen markets that shoot first and ask questions later.

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