A case can be made for a larger correction than I am looking for:
- On an intermediate term basis sentiment is still overly bullish.
- Everybody is a momentum investor these days so lower prices could lead to yet lower prices.
- Middle East tensions and rising oil prices could continue.
- Sovereign and municipal issues could surface.
While I respect that there is a possibility this will occur, I believe a larger correction is likely going to have to wait until after April. Assuming the market corrects in the coming week we will reach option expiration with the market maximum oversold. That should give the market some support for a few days. That would bring us to the turn of the month. We would be heading into the strongest month of the year, with the market just having been through a correction. I believe that should at least buffer the downside.
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