Second, there are bull market corrections and bear market rallies.  The upward trend of bull markets are almost always a jagged line with drops.  This is, in fact, healthy for the market and often called backfilling.  Bear market rallies are equally misleading to short-term investors.  They are also called “dead cat bounces” referring to the rather inhumane notion of tossing a dead cat off the roof of your garage and noticing it does bounce a little when it hits the driveway, just like rallies only bounce a little during a bear market.

This bull market will end with either a flow of bad economic data or a sudden financial disaster.  Neither is likely in the near future.  The U.S. has been in a long bull market, which is not surprising following such a severe recession.  Today’s DOL reports that 215,000 jobs were produced last month, which shows the economy continues to be a job-creation machine, and makes a minor interest rate increase more likely and unduly frightens investors.  The economic data remains good.

There is little outside the opaque derivatives market that worries me right now.  The U.S. banks may have TOO MUCH capital now, which protects their shareholders along with our financial system.

This is a bull market correction and should be viewed as a buying opportunity, not a selling season.