Subscribe Log In HOME DAILY DIARY ASSET CLASS SECTOR LATEST STREET NOTES AUTHORS OPTIONS RMPIA SWITCH PRODUCT Home / Investing / Stocks Is This Normal Corrective Action ... or Overreaction? The big question now is whether the selling over the new variant was severe enough to produce some bounce action next week? By JAMES "REV SHARK" DEPORRE Nov 26, 2021 | 01:31 PM EST The half day of trading following the Thanksgiving holiday is typically quiet with a positive bias, but Friday was a bit different. Conditions looked good for that sort of action until news hit of a new COVID variant that the World Health Organization has named "omicron." There is little information known at this time, but several countries rushed to limit travel, and the big drug companies are already looking into modifying vaccines. The news triggered some panic selling as airlines, and travel-related stocks were hit hard while some of the traditional "stay at home" players did well. Breadth was more than five to one negative, but the hard-hit growth stocks held up much better than the indexes that have yet to correct. It is interesting that the news hit at the exact time that many were looking for deeper corrective action in the indexes. As I've discussed, many folks have been wondering how the indexes could correct so that they would be more in line with the overall market. That took place to some degree Friday. The big question now is whether the selling was severe enough to produce some bounce action next week, or do we need another push lower before the dip buyers feel comfortable going to work. My thesis is that the market is overreacting to omicron, but that it will take a few days to come to recognize that. If there are any cases in the U.S., then there is likely to be even more concern, but once we have further details about this variant, I believe the market will discount it fairly quickly. It is just of matter of staying patient and waiting for the news flow to unfold. Regardless of what happens, the good news is that we should have some good volatility to trade. Have a great weekend. I'll see you next Monday. Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article. TAGS: Investing | Stocks MORE FROM STOCKS Bearish Bets: 2 Nasdaq Stocks You Should Consider Shorting This Week BOB LANG Nov 28, 2021 10:45 AM EST These recently downgraded names are displaying both quantitative and technical deterioration. I'm Not Getting That Flash Crash Feeling TIMOTHY COLLINS Nov 26, 2021 12:13 PM EST My view is to eat some leftovers, let the rest of the day play out, and come in fresh on Monday. This Pandemic Is an Endemic JIM COLLINS Nov 26, 2021 11:00 AM EST Because things are changing in the world, make sure your portfolio is protected with real returns. Here's the Key to Navigating This Sort of Action JAMES "REV SHARK" DEPORRE Nov 26, 2021 10:32 AM EST When traders start to look harder for those names that are being sold without justification, that's the time to be more aggressive. Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here. COLUMNIST CONVERSATION 12:19 PM EST STEPHEN GUILFOYLE We Added to a Position in the Stocks Under $10 Portfolio Check it out here! 11:51 AM EST GARY BERMAN S&P Futures Fibocall: S&P Futures It seems like more an... 11:40 AM EST GARY BERMAN 10-Year Note Yield (LT View) Fibocall: The 10-Year Note Yield You will hear ... See More NEWS BREAKS Powered by BABA Alibaba downgraded to Buy from Conviction Buy at Goldman Sachs Nov 28, 2021 | 03:11 PM EST Nov 28, 2021 | 03:05 PM EST MRNA Moderna has been preparing for emergence of new variants, says Piper Sandler Nov 26, 2021 | 12:35 PM EST UUGRY United Utilities price target raised to 1,100 GBp from 1,060 GBp at JPMorgan Nov 26, 2021 | 11:39 AM EST MITFF Mitie Group price target raised to 79 GBp from 78 GBp at JPMorgan Nov 26, 2021 | 11:38 AM EST See More COLUMNIST TWEETS A Twitter List by realmoney About Privacy Terms of Use © 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281 Need Help? Contact Customer Service Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group. TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period. FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month. COMPARE BROKERS