Market's 10 Day Ascent: Now What?

At this point, with the steam the market has built up I think it’s going to take one of two things to occur before we see this mythic market correction that everybody has been expecting for what seems to be forever. The market is at a tricky juncture, being extremely overbought and refusing to drop. Hitting the beach is always an option.

1. Some significant bearish catalyst. Could be a bellwether coming in with extremely weak earnings. Maybe a terrible government report or more likely additional government interventions in the markets. Natural disaster perhaps…. Yes I’m stretching there, but my point here is that until the market's character is tainted, the up move is likely to continue.
2. Blow-off top, culminating in a huge move up sucking in every last baby bull that has been on the sidelines that can’t take it anymore.

Be on the lookout for either of these scenarios to play out before thinking about shorting.

Comments

[Maxe Paul:]

"mythic market correction", sorry if my memory is incorrect, but didn't we just have a correction for 3 or 4 weeks?

Didn't the S&P fall from 950 to 870? Am i missing something here?

Jul 22 08:17 AM

[twotraps:]

Yes, the mkt has done well since March. Against the backdrop of the larger time frame..the move down from the 1350 area to 667...we are flirting with maintaining the 38% area of 930 or so. In that respect its a tipping point, is this enough to break the larger downtrend? Prices have yet to experience any significant rejection of higher levels at this point...until that happens, go with the move. It does not have to make sense for you to make money.

Jul 22 08:42 AM

[Hmm?!:]

True. Maybe Logic and Elvis have left the building. However why can't the market go up. If stocks hold their value as the dollar becomes worthless.......... then isn't it just a wash from the global sense?


On Jul 22 08:42 AM twotraps wrote:

> Yes, the mkt has done well since March. Against the backdrop of the
> larger time frame..the move down from the 1350 area to 667...we are
> flirting with maintaining the 38% area of 930 or so. In that respect
> its a tipping point, is this enough to break the larger downtrend?
> Prices have yet to experience any significant rejection of higher
> levels at this point...until that happens, go with the move. It does
> not have to make sense for you to make money.

Jul 23 05:56 PM