Correction near

Discussion in 'Trading' started by Eagletrader, Feb 23, 2006.

  1. There is a funny thing about sentiment. You don't want to be part of the majority. So it is natural when traders point to put call ratios and ISEE numbers and declare "Sentiment is not right for a top" - i.e. "Everybody else is bearish, so I am not" syndrome.

    Top or not, I think a significant correction is at hand..................

    Europe has been a lot stronger market than the US, so I would look there to start.

    Comments with charts at:
  2. Eagletrader, how do you define a "significant correction"? 2%, 5% 10%, 12%? Do you have specific numerical targets for the various global indices?

  3. CPT.. I am not a huge fan of targets. Sometimes a correction only chops around sideways, sometimes it plunges. One thing is for sure - its never worth the risk to ride it out.

    As has been mentioned elsewhere topping is a process, not a point. You have a few scary declines and the market comes back. Then one time it does not come back after most traders have been conditioned to bottom pick after every 3-5% decline..

  4. We done with correcting ? I think markets are oversold with very moderate price correction. That implies odds on for a bounce before any substantial decline.