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S & P - One Swallow Does Not A Summer Make. Nor Does One Key Reversal Change A Trend.

Monday Evening  2 May 2011

 Monday shows as a reversal, making a new high, then closing
poorly on the low end of the day's range and lower than the
previous day.  What it does, initially, is say a correction is about
to ensue, and we get to judge the character of how it unfolds in
the day[s] ahead.  Certainly, the selling volume was not that
impressive and not indicative of a selling climax.

 This is an opportunity to demonstrate how one need not be in
the  business of prediction, but can instead prepare for what might develop within an uptrending market.  There is support
around the 1338 - 1340 area, and a 50% retracement would be
around 1334.  The latter is but a guide that can be a tell of a
market's strength.  Strong markets tend to hold or stay above
a 50% retracement.  In this instance, known support is already
above it, so one would expect to see it hold, if retested. 

 If the correction, and let us qualify that we mean potential
correction, for one has not yet ensued, if it develops on weak
selling and less volume, it will present another buying opportunity
to establish a position within a trending bull market.  By paying
attention to the character of HOW a correction develops, there is
no need to guess or predict what might happen.  As we stated in 
a recent article, stay one step behind the market, and let it tell you
its intent.  [See Silver - A Follow Up, click on http://bit.ly/jJ5rgg, 4th
paragraph].

 It always does, for those patient enough to wait for the message.

 

Any questions or comments can be sent to mn@edgetraderplus.com. 
Web site: www.edgetraderplus.com

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S&P D 2 May 11