The general market gave 3 red candles over the last 3 days (the last 2 are great long candles). It had been 3 great trading days for me. I started playing ES (S&P 500 e-mini futures) again 2 days ago after a long break. Many indicators are already showing at least a short term correction is in process.
The market is long due for correction and is just finding an excuse to correct itself. The excuse for now are the tightening of bank lending in China and U.S. President Obama's reform of the US financial markets.
The big question is whether this is the big correction of at least 38.2% Fibonacci level. That will bring the DOW to around 9,100 or below. A great correction will bring the DOW to at least 61.8% Fibonacci level at 8,100 or below.
Currently, the DOW 30, S&P 500 and NASDAQ Composite indices are resting near or at the support line (see the trendline drawn on the charts above) - around the October high. The next milestone is for the major indices to break and stay below November 2009 low. Following that, we should then track the swing lows and the Fibonacci levels of 50%, 61.8% ....... If this is the Correction, we could expect the Correction to last for at least 2 mths - depending on how low the market wants to correct itself.
Cheers !
PersianCat (Millionaire-in-progress)
