Mother of all correction started ?

TAPE was under severe selling pressure on Friday as indices reversed from all time high.

IBD saying "market in correction"

Carter Worth saying Monday is never good after Friday selloff.

Many technicians are counting how low it will go......

Roubini predicting 10% correction..

Many pundits are announcing "market in bubble territory"

Doug Kass saying "not many bears left" & "indices are not going from lower left to upper right"

SO.....with all those predictions there is no hope for this TAPE?

Let us see what reasons are being given for this plunge :

-Jobs report was bad...

-Tax deadline of April 15 may be a factor..

-HFT focus by DOJ, FBI & NY Sec causing this plunge....

Lowest prediction for this market is for a 17% correction in S&P 500 to 1576.....

Many are using an old table of PE of 10 means undervalued & PE of 20 means overvalued....

Nasdaq is showing the-most weakness & is @ 2 month low.....this is because "hyper growth stocks are being sold relentlessly & steady growth being bought".....

BUT...those are in "rear view"

The question is why VIX only jumped 4.4% when "sky was falling"

VIX closed @ 13.96 ?

YES..there is a shift in "traders sentiment"

Focus is on PE NOT on price to Sales...S&P 500 trades @ price to sales of 1.7 while FB trades @ 20...that is the number for Friday close....

It is important to note the "shift in traders Psychology"

Bargains are all over some are trading in 20 RSI...but does that means this is the best stock going forward?

It looks like Nasdaq momentum has faded & may remain under "contraction of price to sales"

S&P 500 & Dow looks healthy & no real damage has been done.....

It is important to note previous corrections as listed below :

2012 8%

2013 7%

2014 so far this year 6%

I do not see this correction going beyond 8% pullback...which means that S&P 500 has a "potential downside to 1740.......

Currently sentiment is "extremely bearish" based on media & pundits.....which only means that we may have a snapback even for Monday close...yes green close is possible on Monday......

By the way...jobs reports are always being "revised UP".....so no teeth there.....

SO.....try to know that sectors are changing & "earnings do matter"

Do a calculation on all your stocks in terms of PE ratio.....lower the better......that will be a "reality going forward"

VIX is saying relax & change your portfolio mix..its as simple as that......

BLOG does NOT give buy or sell.

Saleem