The market is getting oversold here short term. Currently, we only have 13% of stocks above their 40-day moving average, a level where the market has tended to bounce from. However, if the current scenario plays out like 2011 which so far it has, we then have to be on the look out for another flush. In 2011 stocks above their 40-day moving average got as low as 2%.
But, the big news of the day was and is Carl Icahn's market comment in which he warns of a potential looming catastrophe. Carl said he's "more hedged now than I've been in years. That comment will be followed by a video titled "Danger Ahead" that will be released tonight at midnight. What's interesting is that Carl just took an 8.5% stake in FCX, bought more of his biggest losers CVR, CHK, and RIG. The bearish bloggers are going to have a field day with what Icahn said today, ("billionaire investor is more bearish than he was in 2008 when the market plunged 50%"). Whatever. In 2011, Ichan gave his clients all their money back because he was also concern about a big correction. “Given the rapid market run-up over the past two years and our ongoing concerns about economic outlook, and recent political tensions in the Middle East, I do not wish to be responsible to limited partners through another possible market crisis.”
Like everyone else, Carl is going to get some right, and he will get some wrong. Fine-tuning your entire portfolio based on his comments, definitely wrong.