Correction Should Start Soon

I'd like to make a brief update on stock market. It looks like there will be no extended distribution phase as I suspected for some time. I think chances are now better that indexes are already in the final climax top phase, that should end this 9-week cycle and easy-money period.

I don't bother too much with cycles at the moment as these became irrelevant in runaway moves. I don't believe 9-week cycle low is already behind us. The correction simply hasn't been severe enough. As I've said before the 9-week cycle can easily extend into 11 or 12 weeks, so there is still plenty of time for a deeper correction.

I like to use historical charts to get an idea of what markets may do in the near term future. I think November 2010 could be used as a proxy for current conditions. As seen on chart below SPX broke out from a tight range base on huge volume up day that stalled on the second day, and then experienced a 5% correction. I don't expect the very same thing to happen now (markets never repeat themselves exactly), but I do expect that correction will start in a couple of days. I believe many traders will see this breakout to new highs as a new buy opportunity, but public is always wrong on the market. This time it should be no different. Currently I still hold two minor positions. If we get any further strength on Monday they will probably be sold.