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Back in late May we sent a report to our mini-institutional clients comparing the current correction to prior 5% corrections of the current bull market. The chart below is an update to one presented in the report which highlighted each correction. As noted, the pattern of the current correction bears a striking resemblance to the first half of the market’s correction just over a year ago in March/April 2005:

Using our database of intraday trading, we compared the two periods and found that the similarities between the two corrections are also evident on an intraday basis. If (and this is a big if) the pattern continues, this would imply that the Dow still has about 3% of potential downside risk over the next two and a half weeks before a meaningful rally can take hold:

Source: Market Corrections Past vs. Present (ETFs: SPY, DIA)