Correction or Selloff? Buy the dips or sell the dips?

The short answer - no way to tell yet, since none of the technicals have been broken. As traders we can quickly jump on it with FAZ, SDS, whatever..and jump off at he next stop...But as investors we must take a stand. I remain near term bearish as a trader...riding with the trend..which I believe is shaping like it will be heading lower for now. I remain bullish on the intermediate term, unless some of the technical levels I am watching, get decisively broken.

Strategy:

Near term: just trying to get out of the way, selling high beta stuff, which can really hurt you even in a mild corrective phase...Anything more than 7% loss is automatically out too (some exceptions). At the same time watching like a hawk for this correction to subside near technical support levels...watching action in the afternoon, etc, for some clues. I am also picking up some Gold/Silver stocks and wathicng for some oversold E&P and energy names that are getting killed today.

Intermediate term: Putting together a list of stocks I will be buying if we do get to hold, as I am expecting.

The rally is way overdue, so not surprising or terribly alarming. I am very encouraged by M&A activity, with four definitive agreements announced today. There are many more on prowl, especially in technology and healthcare. With strong balance sheet and many cheap valuations out there, startegi buyers are stepping in. Hopefully, PE is paying attention and gets involved. The VC and PE activity has been so weak, that anything is an uptick from here.

Technical Levels I am watching:

DJIA - 7500-7800
SPX- 800--820
COMP -1560-1580