Last evening we stated that we expected another rally attempt at some point today. The Dow in fact rallied 25 points to a print high of
10,514.99 this afternoon, before pulling back down. The Dow closed up 3.18, with the Nasdaq closing down 0.91.
Last evening we also stated that the odds favored further sideways-to-down action before this correction was over, and the next wave
up to even higher highs begins. By this we mean, we expect rally attempts which will ultimately prove unsustainable, and will be followed by another correction to lower lows. We also believe any rally attempt over the very
short term will prove fairly short-lived, and that another decline to somewhat lower lows will follow any short-term rally attempt in this time frame.
Keep in mind that we still believe that higher highs will still follow any correction in this time frame, even if that correction lasts a little longer than most would expect. What we could see from here is a
sideways up-and-down action for the next week or two. We could see rallies which ultimately fail to sustain any real breakout to significantly higher highs, and/or declines which might prove substantial over the very short
term, but fail to last for more than another week or so before we begin another rally to even higher highs.
For Wednesday, any decline below 10,432 on a print basis on the Dow and 2068.98 on the Nasdaq will signal that an even stronger correction is
coming at some point tomorrow.
For now we will take no new action until it becomes clear that the current correction has run its course and the next major move to significantly higher highs is underway. |
