We have been looking for the market to hit 4680 which is exactly what it did this week.
At this level support was found and the banking stocks got a kick as the yield investors started to buy.
It is interesting to note that the other sectors did not follow suit.
The market pull back can now be measured as a drop of 10% over the past month. The other important issue is that rate of the pullback is quicker then the rise.
The next big question is will it drop further?
Given that monetary policy in the US has not even started to be wound back and that our election is still months off I expect further falls.
However, this should not stop you buying into this market. At the current levels there are a number of companies, which represent a good buying opportunity.
I would however continue to maintain some cash to be used if/when the market pulls back further.
What is clear is that we are not in a Bull market right now. The economy will simply not support a Bull market at present.
Continue to buy over sold quality companies and remain cautious as we have some way to go before the volatility is out of the market.
Holding cash is no longer an option, take all opportunities.