With todays decline (combined with) high investor pessimism, we have the potential for a short or intermediate term bottom to be put in place. The Investors Intelligence Survey of Newsletter writers is at 43.8%. 35% or lower has usually coincided with market lows during major corrections, and in many cases, bear market bottoms.
Put/Call Ratios have also risen sharply showing a willingness by investors to buy puts that allow them to profit if the market declines. The S&P Liquidity Premium is indicating that investors are moving into investments that are diversified or have lower volatility such as ETF's.
This correction has been healthy and if we can hold here, we have the potential for a solid rally.