Coach Mark here.

My brother Matt and I are huge fans of Warren Buffett. I mean, how can you not be? The guy is a legend. His approach to the markets is sometimes dismissed during times of euphoria but his approach to the markets always seems to get the last word.

One of the underappreciated things about Warren Buffett has been his ability to take complex market concepts and through simple quotes, clearly illustrate an important topic. Buffett has had many gems along these lines over the years.

A Buffett quote that came to mind this morning as I was working through my market notes was the following:

• I don’t look to jump over seven-foot bars; I look around for one-foot bars that I can step over.”  

Buffet was using this quote to describe long-term investments that are no brainers. Investments where the fundamentals are so clear and the price is so cheap that he follows his own “Rule 1” (Don’t Lose Money) by entering. While Buffett was referencing long-term investing, the quote came to my mind when I was looking at technical charts this morning.

I love bottoming patterns. I love reversals. I do not see a lot of one-foot bars out there on the patterns today. Some three-foot bars, some seven-foot bars, but not a lot of one-foot bars. I am going to keep looking for those one-foot bars to jump over when putting my money to work in the coming weeks and months during this selloff. Selloffs produce opportunities….I want those opportunities to be easy to step over. One-foot bar style.

Have a fantastic Thursday!

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Chart of the Day: S&P 500 (SPY)

Not a one-foot bar pattern for either the bulls or the bears on the broad market as we have not had a support level hold and we are in very oversold conditions as we work towards the end of the week.

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