Time to Buy

In Wednesday morning's better-late-than-never column, I cited the filling of the May 4 gap in the S&P 500 at 1391.57 as the best reason -- maybe the only reason -- that the market stalled at that level Monday morning, topping out at 1391.74, and then turned south. A few days later, the S&P 500 is 36 points lower. The Dow Jones Industrial Average has collapsed 350 points from Monday's high. The Russell 2000 has sold off to within a fraction of a point of last week's multi-week low.

I also noted that the top of the May 4 gap was the ideal spot to sell. I used the return to new multi-month highs in the S&P 500 to lighten up further in that sector. At that point, cut back to a maximum of 45% invested. But as the market erases all of last Friday's sharp pop, there are compelling opportunities on the long side again -- at least that's what it looks like from here....629 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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