Just got this from Bernie, so I blaming him if this isn't a top LOL
MARKET TO UNDERGO RELATIVELY MINOR CORRECTION.
January 16, 2010
Within the context of the recent market experience (virtually straight up), the next couple of weeks will feel like a bonafide correction, but will likely be limited to three (3) to four (4) percent, with SPY Fibonacci Cluster Support downside objectives of 111.37 to 110.34.
The turndate cyclical high projected for 1/12 - 1/14 came on schedule.
Our short term bearishness hinges on several factors.
1. Bearish Momentum Divergence confirmed by Friday's action.
2. Bullish Sentiment as measured by our Call/Put ratio reached a 39 week high.
3. Bearish Weekly Squat generated on Smallest Weekly Range in over a year (except for holiday weeks).
4. Five (5) week low in New Economy vs Old Economy stocks.
5. Non confirmation NYSE 52 week highs despite higher prices.
A potential bigger correction looms only after this relatively minor pullback, followed by a lackluster rally into the middle of the first quarter. For the top to be of major consequence requires our VDI to turn bearish at the rally's conclusion.
A turn date cyclical low is likely 1/22 - 1/26 with 1/25 the preferred date.
Our playing defense paid off. Coming in short 114.62 we exited by going long ES futures 1142 equiv to 114.65 for -.03 - - reshort 114.98 in overnight trade - - exited 114.58 for +.40, reshort 114.72 - - exited 114.37 for +.35, reshort 114.53 - - exited 114.12 for +.41.
FLAT OVER WEEKEND - Look to reshort 114.17 - 114.40.
Use 115.40 Protective Stop.
Long/Short SPY points current series +2.62
Long/Short SPY points (incl. all previous series 40 weeks +113.81)
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