Friday, February 25, 2011

Is this a short term wiggle or the start of something bigger?

I touched on this in my video for today, so I’m just circling back here with a more detailed opinion.

I do not believe we have started a bigger correction. For now, I believe we are just seeing a pullback in an uptrend, and I will be looking for us to resume the move higher, at the least until we hit the 1382 level, basis the S&P 500 cash index. That being said, if we do start a bounce, I will be measuring that bounce based on volume and breadth/leadership and will be marking off Fibonacci levels as well as high volume nodes for places that resistance may come in. If resistance does hold, then I will be looking to get on board the short side for a trade.

In case you are new to the blog, I have been looking for a correction for some time now. The best we have gotten has been a day or two of lower prices, and maybe a week of consolidation, but not much more than that. Until we start to see something greater than a blip, there is no reason to try and guess at when the trend will stop and reverse. Remember, one of the principles of price action is that a trend has a greater likelihood of continuing than reversing.

If you have any questions, or if you need any assistance, feel free to contact me at tinymjs at gmail dot com.

Michael tiny Saul

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