The S&P 500 has been down seven out of the last eight days and has more than erased the rally following the Fed announcement of QE Infinity. While I don't believe this is a great buying opportunity we should see some sort of a bounce in the next few days.
The reason I don't believe this is a great buying opportunity is because sentiment is still too bullish on an intermediate term basis. With that said its likely any further dips in the next couple of days could be bought for a bounce. Once we get a bounce the market outlook becomes a lot murkier. We have seen in recent years sentiment stay extreme heading into year end numerous times. At the same time staying long when there is excess optimism is a dicey proposition. A further decline in October that sours sentiment would create a better opportunity into year end.
For my part I am moderately long. I was out of the office yesterday but stuck in a buy order on Tuesday to remove some hedges if we dipped further. That order was filled yesterday morning. I will look to use a bounce in the coming days to reinstate those hedges.