The stock market's steep two-day selloff may be the long-awaited pull back traders have been looking for, but strategists expect the market to stabilize and move higher before too long.
The market is now in its biggest decline since last fall, with the S&P 500 off a still shallow 5.87 percent from its all-time intraday or 1687, reached May 22. Stocks sold off Thursday with other risk markets, as the dollar and interest rates rose after the Federal Reserve Wednesday signaled it could begin to pare back on its bond purchases before the end of the year and end the program by the middle of next year.
"I think this is a tempest in a tea pot. It's a long overdue correction. We're back to where we were, in terms of where the market was, on May 2. Stem to stern, it was a six percent correction," said Steve Massocca of Wedbush Securities. "I just don't think it's going to get that nasty or bad. I think we could drop off a little lower and you could start putting money to work here. Is this the beginning of a new bear market?...Not with the 10-year at 2.4 percent and the Fed ready to step on the gas at a moment's notice."