NEW YORK (TheStreet) -- As I mentioned in last Friday's column, the intraday turn in the DJIA
On Monday morning, all the indexes opened to the upside but quickly sold off by mid-morning. At one point the DJIA was off 88 points, and the Nasdaq
As has been a common market reaction on a daily basis, buyers came in and brought the DJIA all the way back to flat in the afternoon. By the close, the DJIA was down 26 points and the S&P was down 9. The Nasdaq was whacked to the tune of 50 points and the Russell 2000
Volatility has been the theme of my columns. And Monday was no different. This stock market in 2014 has been a traders market. A time frame of a week or more has quickly become known as a long-term strategy.
The algorithm-programmed machines and the hedge funders are in control of this market. They are trading this market between their programmed S&P daily trading ranges.
Traders need a risk-management process that works. They need to recognize when stocks are oversold and when they are overbought, then act accordingly. This is no market for buy and hold.
Many market pundits are beginning to forecast that this market is headed for a 5% to 10% correction. That is way premature. The market indices, especially the Nasdaq and Russell 2000, are approaching an oversold condition on the daily time frame. If those indices can open on Tuesday to the downside, both indices will then be oversold. Many large-cap stocks -- stocks with a market cap in excess of $4 billion -- are also oversold. This week should see a turn to the upside in many of those stocks. The focus of traders should be to the long side now. The market will be sufficiently oversold on a down open.
This stock market is still trend-bullish, which is a three month or more time frame. Getting to bearish in this area will lead to many missed opportunities to the upside. Unless certain technical levels of support are breached on the downside, this market will remain in a bullish trend. This market is not yet close to those support levels. So continue to look for those oversold, long positions.
At the time of publication, the author held Xylem and Zynga, but held no positions in any of the other stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.