As per the last blog entry the "Critical Juncture", it was "Time" for the market to correct. Now the big question; “is this the start of something bigger”? As per my previous chart all markets have reached their primary targets for a meaningful reversal. The first wave down is now complete and the ensuing retracemement will give us a hint of what to expect over the next few months. It is very much possibly that we may see one more high this year as long as we stay above the February lows. The current correction was impulsive in nature so we must all be aware that this could be the big one. What I mean by that is that we could be in the midst of the 3rd wave down. The 3rd wave is never the shortest and usually the largest and most dynamic wave. If this is the case we may see the market retrace the majority or more of the rise over the last 14months. My gut feel is that we correct over the next few months to setup a year end rally that may carry into the q1 of 2011, and rise either new highs or lower highs. Therefore setting up for a major correction in the next bear market cycle in 2011 to 2013.
Forecasting is not exact but I use it as tool to understand the primary trend. It is very important to understand that flexibility is paramount in forecasting market trends. The market trends could last a lot longer than anyone can imagine thus you must always be aware of the alternate scenario. That is why when I do provide my analysis it may look like I am contradicting myself but actually I am just protecting myself. I can always guarantee that the market is going up or down but determine the trend and knowing what the primary trend can save you a lot in the long run.
"Remember this is just One Man's Opinion"