The pieces of evidence for a correction are falling into place. What's missing now is a break down
sharp enough to take the market below the uptrend line from the end of Aug. ' 10. The $SPX is
just slightly oversold at the current level and by my standards would need to fall a good 4-5% to
be interesting as a quick rebound trade. So, if it pops up from here, I will likely miss it. $SPX Chart
The market is working off an intermediate term overbought against its 200 day m/a. Momentum
has flagged enough here to leave me with a continuing mechanical sell signal. The odds of a
substantial new uptrend with some staying power developing in the absence of a further unwinding
of the intermediate term overbought are low but not negligible. So, from the vantage point of my
trading discipline, I am content to bide my time if there is no sharp sell off in the cards short term.
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