By The Book

Trying to trade this market based on past experience has been difficult, as the market has set all sorts of records with the persistence of the most recent rally. With that caveat, it would be quite unusual if the correction were already over. As a result I have used the pre-market strength to put back on the hedges I removed when the market was 1% lower.

There are two reasons that I believe this correction is not over, time and sentiment. Ideally a correction would last 10 trading days, at which point the correction would become exhausted. If the correction is already over than it lasted all of 3 trading days, maybe 4 depending on how you mark the beginning of the correction. A correction is supposed to move sentiment closer to neutral territory and I don't believe three down days were enough to accomplish that. At a minimum I would expect a few more days of choppy action.


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