As I read reports from other market analysts and as I watch financial commentary on the news, I’m surprised by the number who claim they accurately predicted this current market downturn. I follow the comments of most of these folks regularly and I don’t recall many of them saying that a major correction was on the horizon. Of course, there are always a few who constantly predict we are on the verge of a market meltdown. And each time there is even a minor correction they claim vindication.

Many years ago I wrote for Howard Ruff when his investment newsletter was the most widely read in the country. He said the key to being a good market forecaster was to forecast often. I’m sure he was only partly joking. That was almost two decades ago and in the ensuing years, I’ve learned that no one can accurately predict what the markets will do in every situation. Even powerful men who wield great influence over the markets like the Federal Reserve Chairman or legendary investor Warren Buffet are sometimes surprised by market events.

Today I can add little to last week’s assessment of market conditions. The investment community around the world is waiting for the major U.S. averages to confirm that they have bottomed. Until that happens, most sectors will tread water or lose ground. Once the bottom is in place, watch for a powerful surge in stock prices. Today’s action might be the start of that move.

As I wrote earlier, as an individual investor I would monitor this current market using a 200-day moving average. I would take long positions (buy) when the Nasdaq crosses back above that 200-day MA. The sectors that usually perform best on the upswing tend to be those that were strongest before the correction. In this instance that would include international funds, gold funds, and energy funds. In addition, technology funds usually perform well coming off of market bottoms.

I’m including a chart of the Nasdaq. You can see that the index appears to be advancing, although it has not yet exceeded its 200-day MA. The momentum indicator on the bottom of the chart is on the verge of going positive.

I’m also including a table showing the performance and ranking of most Exchange-Traded Funds (ETFs) over the past month. You can see that only a handful avoided negative returns.