Well, the big red arrows say it all.  The market which has felt overbought for some time now has moved into oversold territory with a vengeance.  Of course, it is no secret to my regular readers that I am an avid short seller, but the past week left me on the wrong side of the volatility often enough to keep me tense to the final bell on the final day.  All said, this was not an easy week to trade.  Every day felt certain to be the reversal.  Every day was just the start of another leg lower.  When all was said and done, the retest of 11,073 that we have been anticipating showed up for duty in just a few sessions rather than across a series of pullbacks.  You really need to know the quick route to the exits when the elephants see the mice.

We proselytized about the market gaining too much ground too quickly, and friends and the not so friendly said we were doomsayers. I had long conversations with my value investor friends, and heard the same old song about missing the boat and having to get in high for risk of missing the rest of the ride and the big dividends to come.  I asked repeatedly what purpose a guaranteed 6% return on a so-so stock had if the underlier could lose that in one ill-fated session.  But, we all find ourselves at the fear and greed crossroads over and over again.  Buy high sell low or buy and hope, it all amounts to the same thing.  If you think you are missing the train, avoid at all costs stepping in front of it, and wait for the next one to arrive at the station.

All that being said, the big red arrow really speaks for itself.  The Dow is retesting support, and trade opportunities for the next several sessions will most likely present themselves in the form of pullbacks and declines.  What will happen next month?  My response is really pretty straight forward. Who cares?  Trade what the market gives you and donââ,¬â"¢t worry about the move you missed.  There is nothing you can do about it without the benefit of a time machine, and as that is unlikely to be part of your analysis arsenal, it is truly better to focus on the week ahead.

Dow Jones Industrial Average

NASDAQ Composite

Keep your powder dry, and wait for the market to tell you what to do.

Adrian Manz is the author of Around The Horn: A Trader's Guide To Consistently Scoring In The Markets and is cofounder of TraderInsight.com. Email him at adrian@traderinsight.com.