Yesterday the stock market had a bad day. The S&P 500 index lost 2 percent and is now negative for the year. The NASDAQ was down more than 3%.

Bear markets and corrections tend to be shorter and steeper than bull markets generally. The cacophony on CNBC featured technical analysts drawing channels on charts showing how far above trend the market is. Using these minimum and maximum points to draw channels presumes that the overvaluation and undervaluation of markets, at extremes, is equal. I believe that is flawed logic.

In 2009, the bottom fell out of the market, in large part due to illiquidity. Leveraged funds were forced to sell what they could, which in many cases were the better capitalized public companies that predominate major indexes. I believe the overshoot on the downside, from panic and illiquidity, tends to exceed the wall of worry melt-up climb and climatic exuberance of bull markets. In other words, don’t assume the middle of the channel is the deepest part (to use a boating metaphor), or the best representation of intrinsic value.

Commentary was quick to draw comparisons to 2000 and 2009 corrections. I see little to compare. In 2000, valuations were about 50% higher on average than today. The internet bubble burst. In 2009, we experienced a banking crisis precipitated by a collapsing housing and mortgage market, with repercussions few imagined.

One legitimate concern today is the effect rising interest rates will have on corporate earnings and the economy in general. To the extent companies use debt to finance operations, and consumers use credit to buy from companies, the rising cost of money will be a drag on profits from the expense side, and consumption from the revenue side. That is certain to squeeze net margins, and suggests today’s historically average price/earnings multiples may be optimistic.

However, a big offset is the improving job and housing markets that point to a normalized economy. With improving housing and jobs, we may continue the slow healing of the economy from the mortgage crisis. As for yesterday’s sell-off, I see no need to panic. In fact, I see a clearance sale.