Wednesday, December 14, 2011

Nice mini-correction

It's too soon to be able to tell for sure whether this current "mini-correction" to the recent stock market rally might blossom into a full-blown correction or at least a definitive return to the existing trading range. Traders and short-term speculators will continue to "test" the market, probing for further weakness – or strength.
 
The market may have hit its low for this mini-correction this morning. We'll have to see if that is a definitive low or just an intermediate low with people "taking a breather" (and a little profits) before resuming.
 
I personally won't be betting that it was a definitive low, but it certainly acted like it, especially after two full days of correction behind it. It did look as if the market reached "selling exhaustion", at least on a short-term basis, and now maybe there is at least a mini short-squeeze underway. But, all of that could just as easily fall apart and reverse without a moment's notice.
 
In any case, none of the market activity of the past few days in any way tells us anything about the longer-term market trend, or even the intermediate-term trend (weeks to months.)

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