The Deeper Correction Has Arrived

My last post reminded our Shufflers that we had to look at the market with a bullish bias, but the age of the bull market was about to become a factor. Trends always have corrections as they progress. During the early life of the trend, many corrections are 2-4 days and relatively small, as traders and investors come into the market and buy small dips to keep the bull market alive. After 3 months of this type of buying, there is a time when a deeper correction occurs. Buyers simply step aside and are more cautious about their purchases. This occurred in July of this year.

We are now under the same market condition. The deeper correction that you are now seeing is “typical” for this stage of trend. A complex correction is the likely outcome over the next week or so. How deep will the correction be? This depends upon the news and financial outlook that develops over the next few weeks of course, but traders should expect many up and down days. The vertical rally is over for now.

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