The S&P 500 (SPY) has corrected about -11% from it's peak and has now tested what I see as the final support level. Notice my higher support levels did not hold very long at all. The drop to 2600 yesterday can be considered close enough to my final support as a test of that level. This recent sell off was on higher volume so another sign of a potential bottom. However, don't rule out further weakness. I mentioned previously, that if we fall below 2575, the market will go much lower. I don't believe we are headed to a bear market yet, but are probably putting in a topping formation to mark the end of the bull market. It looks like markets could be setting up a head and shoulders top and we now need to see the right shoulder form. This means a rally below previous highs and some sideways trading.
The correction may not be over, but we should at least see a substantial or trade-able rally. The rally will be an opportunity to adjust portfolios. This is my 8th update since may last new pick in September. There is no sense suggesting new stocks to buy until there is more indication that this correction is over.