The current correction is -3.14% from the all time highs. So, is this the beginning of a bear market or just the typical (-4% to -7%) pullback that we have seen a few times throughout 2013 that has led to new highs shortly after?
Above is a weekly chart which shows all the pullbacks in 2013 and the support that the 25 EMA (exponential moving average) has provided. So, at the very least, I am expecting the market to fall to this area before reversing back higher. A clean break and close lower of this indicator, then I think we are looking at a correction of up to -10% potentially.
Bottom Line: Next week will be a very important week for market direction. We have a two day FOMC meeting mid week to see if there will be further liquidity taper, as well as more earnings reports to ponder. Thank you for reading.
Contact: portfoliomgt1@gmail.com
586-431-8000
Contact: portfoliomgt1@gmail.com
586-431-8000
