So, is this the begining of the long awaited correction?

Alright, so the market sold off on the news from Apple and then there was this news that Bank of America may have to buy back mortgages they sold via their countrywide financial subsidiary. China also unexpectedly raised rates by 25bps, the first time since 2007. First of all, is it all that surprising that Apple sold off on the news given its run up? Sure, there's some hindsight bias here but just take a look at that chart.

I've been hearing more and more chatter these days about concerns that banks who issued MBS might have to buy them back at original values because they misrepesented them to investors. The Bank of America news today shows that this is now becoming a front and center story. Is this going to be the trigger for a correction? It could very well be. But just like with PIGS, it's probably something that won't derail the bull market because it will likely be dealt with swiftly. You have to always keep in mind this....the authorities are no longer going to be complacent about things like this after the debacle of 2008. I said the same thing regarding PIIGS. I am by no means an expert on this mortgage issue at hand here but just like with PIIGS my instincts tell me this is not a bull market killer even though it could trigger a correction.

The market has been climbing the wall of worry since back in early 2009. Here's the list of worries which never came to fruition....at least not yet! I'm sure I'm missing a few

1. Commercial real estate collapse (spring 2009)
2. Head and shoulders pattern (summer 2009)
3. PIIGS (spring/summer 2010)
4. Double dip recession (summer 2010)
5. Hindenburg omen (summer 20010)
6. MBS misrepresentation/fraud? (fall 2010?)

I still get the feeling though that even if the MBS issues or any other concern for that matter, is going to trigger the correction, we aren't just going to roll over immediately from here. A more likely scenario would be a topping phase that lasts at least 1 week with still a decent chance for 1200. The reason I feel this way is that I still get the sense that too many people are still eagerly anticipating this correction...hell, just look at the title of my post!  We'll just see how this plays out. My best guess for tomorrow is a more downside initially followed by a recovery of some sorts by the close.