Is It Over Yet

It appears that the market is entering a corrective phase. I have found that the most important aspect of corrections is time and not price. The earliest one should be looking for a bounce is late next week as we approach month end. Today is only day one of this decline. That does not mean that we cannot or will not bounce, only that it is not a high probability bet.

The market has been going up for well over four months now, with nary a correction. There is a decent chance that we will see an intermediate term decline. In that case we might not see a sustainable advance until late February. For now I am withholding judgment on whether we are in a short term correction or an intermediate term one. Either way it is too early to buy.

9 comments:

CP said...

The decline is being met with equity call buying. Also we may close under the 10 ema today.

http://www.creditbubblestocks.com/2011/01/watch-out-huge-call-buying-plus-market.html

Anonymous said...

Sold MCZ @ .865 long from .777 (+12%) CASH MONEY OL DAWG

Anonymous said...

Sold GENE @ 5.04 long from 4.95 OL dawg

Anonymous said...

You had a good day dawg.

Anonymous said...

Every dawg has his dayz ol dawg

Anonymous said...

Tsachy,

What's the difference between a "short term" correction and an "intermediate correction", in your interpretation? Beyond the simple one is longer and deeper than the other.

Thanks.

Mike.

Tsachy Mishal said...

Short term is about ten trading days give or take. Intermediate term is six weeks give or take. Given how strong the turn of the month has been I'm not sure we can make ten days as that would mean going down through the turn of the month, which has been so strong.


Within an intermediate term move lower there should be an initial short term move lower, followed by a short term move higher which alleviates the oversold condition but does not reach new highs, followed by another short term move lower. But in this market moves have been straight up or down with few corrective moves in between.

Anonymous said...

Thanks Tsachy.

Anonymous said...

market makers will gun for s&p1300 by friday close.