Do Not Panic - This is a Bull Market

It always amazes me how investors can go from long-term bullish on the market to bearish in a matter of 48 hours. The Dow is within 2% of an all-time high and the S&P 500 is less than 5% from the same feat, yet investors are concerned a bear market is upon us.

First of all look at the situation from the flipside. How hard is it to call the bottom in the market? When the market is 2% from a multi-year low there are always bulls saying it is time to buy, but at the same time that philosophy is also saying stick you neck out try to pick a market bottom. The same can be said for investors fighting the 4-year uptrend and are trying to pick the top of the market.

Back to today. Just yesterday the S&P 500 closed one point below the best closing level in over four years. Today the market is down a whopping 0.5% as of 12:45et and it must be the end of the road for the bull market and owning stocks!!

If you have been following me for years you will know by now I like pullbacks in the market, especially during uptrends. It allows investors to enter at "discounted" prices. After the best January in two decades do you think it would be a surprise if stocks pull back in the early part of February? NO! Therefore let the market pullback as it needs to do and when your ETFs/Stocks hit the levels you want to buy them at - hit the buy button.

Below is a look at the chart of the SPDRs S&P 500 ETF ($SPY) that tracks the aforementioned index. The horizontal white line is price support and the red line is the 50-day moving average. The two indicators are very important support for the ETF and any pullback should remain above the two lines. The white line is at the $148 area, which from current levels is a 1.7% pullback. From the high the pullback would total 2.5%. Both numbers are very small pullbacks in the grand scheme of things and investors should welcome the weakness as an opportunity to buy into solid ETFs/Stocks.