There were technical clues of a major correction to come. They were beginning to show months ago.
With each failed attempt to reach another high, fewer and fewer of the 30 DJIA components did. Picture a brick ceiling. With every failed attempt another brick fell out.
Overall, new highs in all the indices were fewer and fewer and new lows began to increase. Even the Nasdaq's recent new high was suspect as only a handful of the components ( the high fliers) contributed.
The A/D line showed weakening with each rally.
In summation, the ominous technical notes suggest more then a 5-10% correction. In fact, many stocks have exceeded that already, and the correction barely has begun.
So, If one buys the premise that the market correction is in it's early stages, and the industrials have further downside, where does that leave the penny stocks? . Attractive stocks if any are those with sounder fundamentals waiting for the correction ( if that's all it is)to show signs of ending........ not the high risk pennyland arena. Just based on that argument, CPST is not attractive.
I think we're in for treacherous period ahead.
