Is the Correction Over ?

.1. Is The Correction Over? " Is that all there is - if that's all there is then - let's keep investing ." Fearless novice investor Peggy Lee Our last blog was a " buy " signal because the markets were oversold. Monday was an important rally point because it followed on the heels of a large decline ( Friday). But is this second day ( Tuesday August 2nd) without a calamity a reason to say it's all clear and reason to enter the buy side with a vengeance? The market is driven to extremes by fear and greed. When fear dominated there was a near 300 point drop on the Dow. The reasons for the drop - mainly a credit crunch , sub-prime worries, economic slowdown- are well founded. The U.S. business community can't exist if banks simply withdraw credit to all but the Triple A clientele. You can't allow a million homes to go into foreclosure without seeing a broad effect on the economy. Still some believe the size and strength of the economy will power through these problems. If that reasoning is correct , the market is oversold and should see retail and instituional investors re-enter - now in fear of losing out on the next leg up- that is greed will replace fear. In fact one commentator said that Fridays fall of 268 points was a market capitulation - meaning all the sellers who wanted out are washed out - only buyers remain. The Future is Uncertain - until it is the Past