Consolidation, We Need You.

Most everyone is looking for some kind of capitulation, some kind of event that will mark the bottom of this decline.  But, what I want is some sort of consolidation.  We need to start holding the lows and stop dripping lower by the week.  We need to re-test the lows and maybe even re-test it again.  This churning action will provide some backbone to work off of towards a stronger market.  At the minimal, it'll decrease the fear factor and volatility that has reached all-time highs.  

We need calmer waters.  We need to get investors back to focusing on the fundamentals and growth factors and to stop almost exclusively focusing on recession or depression or the end of the world.  That kind of thinking is unproductive at this point.  I say this because so many solid companies are trading at such value centric levels not seen in recent years.  And the kicker is that these companies are so much better (operations, profit, scope, etc.) than five years ago yet their ticker is below the print of that same time.  Ridiculous.  

As mentioned before, forced selling/liquidation is a major cause of this dislocation.  But, also retail investors are selling in droves as well.  Not only that, they are also standing on the sidelines via not contributing money into their 401(k)'s, IRA's, etc.  "Why put money in a poor stock market?"  Ironically, a poor stock market is when you want to invest.  You want to buy low and sell high...REMEMBER!?!  

My advice, and it goes hand-in-hand with the consolidation that I'm awaiting, is for investors to step-in and take advantage of this decline.  Slowly and periodically invest...keep those 401(k) and IRA contributions steady.  This will allow you to benefit over time and also help form a market base.