Wow. To say the Denver Broncos didn't cover the spread is the understatement of the year. Favored over the Seattle Seahawks by two, the Broncos ended up losing the big game by 35 points. Wow. That's the biggest blowout since the 49ers whipped the Broncos 55 to 10 back in 1990 (the biggest-ever margin of victory for a Super Bowl game, by the way). In fact, the Denver/Seattle game last night was the third-biggest Super Bowl drubbing ever; the second biggest was one was in 1986, when Jim McMahon and Walter Payton led the Chicago Bears to victory over New England, 46 to 10. All I can say is, wow. Good thing for you I can pick stocks better than I can pick football teams. Speaking of blowouts... There's no point in pretending like the 800-pound gorilla in the room isn't there. You already know the market got hit hard on Monday. That pullback, and what it means for you, is going to be the focal point of today's newsletter. Before we get into the discussion, though, there's one thing I need to pass along to you here in the shadow of Monday's meltdown... don't freak out! Take a breath, stretch a little bit, resolve to take emotion out of the equation, and let's make a plan of action together. Fair enough? Great. First and foremost, know the pullback from the peak made around mid-January is only a 6% selloff so far. Yes, it's more than a little bit of a dip, but it's nothing uncommon in the grand scheme of things. Sure, it's uncommon given the last couple of years; since September of 2011, the biggest pullback we've suffered is around 4%. But, as far as corrections go, a normal bull market pullback is usually on the order of 9% to 10%. Also bear in mind that since September of 2011, the S&P 500 has gained 63%. We were due for a dip, and if a 6% toll - or even a toll of as much as 16% - is the price we have to pay for a 63% rally in just a little over two years, I'll pay it. The economy is still growing, and the bull market is still alive. This is just a garden-variety stumbling block, and we're seeing it as the beginning of a buying opportunity. Still, in our hunt for the buy-worthy bottom, we need to do some chart surgery. Where are we now? Well, as you can imagine, the S&P 500's big floor at 1773 was smashed today, and sure enough, the floodgates opened. As plentiful as the selling volume was last week, it was even more plentiful on Monday. See, with no support level in place, there's nothing to get in the way of the sellers now. Take a look. The NASDAQ Composite also broke under a long-term support line, as well as closed under its lower Bollinger band. Actually it broke under that rising support line a few days ago, but it sealed the deal with its first close under the lower Bollinger band in quite some time today. You also don't need me to tell you the media's rhetoric changed dramatically today, and that may be the scariest part of Monday's implosion. Since September of 2011, any pullbacks were shrugged off. Today's dip, however, was blamed on a disappointing ISM number (a complete B.S. explanation, by the way, but that's another story). Investors bought the premise, hook, line and sinker. I also saw a couple of articles blaming earnings worries as the culprit. Again, that's a B.S. excuse, but you know what? It doesn't matter. Now that the media knows they can sell the fear story, they're going to keep printing them, exacerbating the bearish problem. In other words, now that the ball's rolling, it's time to start thinking about bigger-picture downside targets... almost. Just an FYI, given the severity of today's downside movement, I'd say it's a pretty good bet we're going to get a dead-cat bounce tomorrow. The VIX is sky high at 21.5, which is right around where the VIX was peaking back in early October when we made our last trade-worthy bottom. Though I don't think the selling is done yet, I do believe the market's a little too oversold right now, and a quick bounce should bleed off some of that pressure. It's not going to change the fact that the market is in a bigger-picture pullback here, however. So where does the bleeding stop? There are a handful of ways to find a likely floor, but they all basically point to the same place... Were we to assume we're en route to a normal 10% correction from peak levels, that would put the S&P 500 at 1665. That wouldn't be tough target to get behind, as it's fairly close to where the S&P 500 rebounded in August and October. A 38.2% Fibonacci retracement of the span between the November-2012 low and the peak last month would put the S&P 500 back around 1653. Along those same lines, a 38.2% Fibonacci retracement of the market's runup since the major low from September-2011 to last month's peak would pull the index back to the 1552 area. A slide of that size would be a 16% dip from the high, which is pushing the limits of "normal" when you're talking about bull market corrections. It wouldn't be a huge stretch, however. Bottom line? Let's just split the difference and use the 1650-ish area as our working target. Just know that the firm target is more of a "we'll know it when we see it" kind of affair, subject to tweaking on a day-to-day basis. Your take-aways are simple enough: (1) This is not the end of the bull market, and as such, this dip is a buying opportunity. (2) Just because the market starts to act a little bullish tomorrow or later this week doesn't mean the rally has renewed itself. The market would have to do some phenomenal damage control to get us to reverse our bigger-picture bearish call. On that note, we've got some trading business to take care of here - go ahead and exit the MicroSemi (MSCC) and Digital River (DRIV) positions, if you haven't shed them already. Their weakness today is 100% attributable to terrible market conditions, but it doesn't matter. Right or wrong, the market's whacking most stocks. We're going to go shopping for bearish or short trades when it looks like the dead-cat bounce is coming to a close. Speaking of trades, congratulations are in order to those of you who are SmallCap Network Elite Opportunity subscribers. You guys just locked in a nice 9% gain on a short position in the SPDR S&P Retail ETF (XRT), if you covered the trade at John Monroe's target price when it was reached today. Oh, and just for the record, that was a 9% gain reaped in about three weeks! That's not too bad at all, considering most people's portfolios have been losing ground like crazy since the middle of last month. I mentioned it a few days ago after the SmallCap Network Elite Opportunity locked in an 11% gain on the Russell 2000 Direxion Daily Small Cap Bear 3X Shares (TZA), but it bears repeating now... those nickels and dimes add up! If you can average a 10% gain on ten trades per year that you wouldn't have otherwise found, you've just tacked on an extra ten percentage points to your portfolio's total annual performance. That's the kind of returns most hedge funds can only dream of, but it's also the kind of trade that John Monroe and the SCN EO team seem to find on a pretty regular basis. Case in point: Thursday's pick from the SmallCap Network Elite Opportunity jumped 24% on Friday. You can see for yourself how they do it - for free - by going here and signing up for a trial. Or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/. Or, maybe you don't like money. Up to you. Let's regroup again on Tuesday to see how things are shaking out. Like we told you above, the size of the selloff should lead to a near-term bounce soon, but this is a pretty crazy environment, which means handicapping the market is still a day-to-day journey.