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As of Monday's close the market was officially down 10% from its 10/9 high. While 2007 has been a year of market corrections, two are very significant while a third also deserves attention.

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We have noticed some recent analysis pointing to comparisons between current market conditions and that of the first part of 2003. We note that this is also the first 10% correction since the decline that occurred between 11/27/02 and 3/11/03.

Below we show the S&P 500's 50-day spread throughout the current bull market. It would be prudent to point out that the 11/27/02 correction preceded the strongest rally since 1990, taking the market up 95.47%.

Having breached the 10% boundary, we would expect that (based on the averages) the market will continue down another 8%.

In addition to the filter above, the graphic below highlights the current correction versus the previous 11/27/02 decline.

The important investment decision left to be made is distinguishing between a correction and a bear market. Based on historical cycles there is a 24% chance that the current decline will result in further losses of 20% or more. However, if we examine the state of our current bull market, it is hardly extended beyond the historical "norm."