Sunday, January 24, 2010

Technical Picture - Market Correction

According to IBD, the seven nastiest bear markets had similar characteristics:

  • rebound of 51%-101% before correcting;
  • correction of 10% - 39% before starting the second leg of the uptrend.
The Nasdaq's 2009 rebound went as high as 83% and the S&P, a touch over the minimum 51%. There's been no significant correction since the rebound started so we are due for one. Look at the 200 DMA as a potential target or use Fibonacci retracement tools.

If you're not short now, look to get short on the next bounce.

1 comment:

Day Tradr said...


I copy-pasted your SPY trade on my blog ( without asking your permission first. Let me know if you want me to make any changes.