The good news is that the NASDAQ flopped at a lower rate than the S&P-500 and the Dow Jones Industrial average. Perhaps such a reversal is a sign the correction is reaching its final stages.

The market finally gets a noticeable correction and word on the street borders on panic. Terrorist attacks in Spain became a tragic excuse for the sellers to overwhelm the buyers with orders. I use the word "excuse" on purpose. The market has been wobbly for some time now, and it is always a mistake to take the latest news of the day or week and apply it to the latest market machinations. Certainly, the market was not anticipating a terrorist attack, instead, the overall prospects for the economy now seem stronger yesterday than they do tomorrow. For a year, the market has giddily ignored a whole host of risks, so we are now at a point where confusion reins, and it is hard to assess just how to price in risks that have always been lingering in the air.

But after all is said and done, The NASDAQ is still only 10% down from its January highs, and the Dow just cracked the 5% correction point. These types of corrections are considered "normal" for a bull market, but we have gone a whole year without these kinds of cooling moves. Any sense of panic has been bubbling through the vicious smackdowns of a whole host of individual stocks, especially the most speculative ones. All this in time to send my recently growing short-term bullishness packing. Seems to me the market has put in a top. While a bear market is probably not ready to return, we are just about back at the point where all rallies must be sold - your choice whether you want to buy the dips.

The market's appetite for risk has been slowly waning. If I am correct on this, all speculative stocks must get sold, especially on rallies and bounces. And folks are only going to play if they can receive some kind of discount to the price of entry. Given the market's loft levels, the proper discounts could be a ways away. Again, it is hard to tell just how low we need to go because we have spent so long pretending that any risks exist. But we should also never forget that a dangerous world does not necessarily equate to a defeated market. The market can be manic and wild, but it also has the capacity to hope for a better future as demonstrated by the sharp rally post 9/11 or the swift market rally starting 5-6 months after Pearl Harbor (and well before anyone could have hoped the Allied powers would be victorious). As Jim Cramer of thestreet.com likes to say: "No one ever made money by panicking."

I will be spending time reviewing the stocks whose earnings reports have been particularly good. The market has swung from the extreme of blind hubris to a blind eye to anything good. Almost all good news has been met with immediate selling. This extreme will have to open up opportunities to land merchandise at much more reasonable prices. The wildcard is whether the store doors have already been closed behind us.

Take care and PLEASE be careful out there!