Market correction analysis

In my previous blog I mentioned that I was looking for a market correction around 12000. We did not have a correction at 12000 but we went ahead to around 12400 before make a dive and recent earthquake in Japan has left the down below 12000. If you take a look at a six month picture of the DOW we see a similar pattern in the last market correction in Novemeber 2010 when the DOW corrected from 11400 to 11000.

Should you be buying in this market dip?

Long term investors may look at this as a buying opportunity and short term traders may well think of looking to get in for few days. With previous market corrections some aggressive strategies that did well were finding most beaten down stocks in the current market correction.

Recently I have been following James Stewart from Smart Money. In his latest article he suggest these growth stocks when market makes a 10% correction which means a 2541 on the NASDAQ.

Market bears look at the volatility and uncertainty over impact of the Japan earthquake and predict that markets might go down further.

Last few days have seen some selling at high volumes and volatility which means there might be further downside potential. What are your thoughts? Will you be buying in at these levels?


Fibonacci series for this last bull run from 11000 to 12400 for the DOW returns 11544 as the 61.8% mark at which some support could be seen with the DOW bumping on these levels.

As for long investing I would add positions into my long term portfolio.

Where is WallStreet headed? Commonly asked questions

Everyone's cheering the upward move in the DOW, S &P and NASDAQ markets in the last few weeks.

There have been various theories as to what could happen next with the market and how long will this continue. I found a few which I can highlight here:

After a spectacular rally from the lows seen last month, the S&P, the DOW appears to be running into overhead resistance.

Click here for the video.

Investor Sajal has highlighted few key points in his blog in Seeking Alpha. Analysts are making different kinds of predictions from this being a bear market rally ready to loose steam or beginning of a new bull market to a bear market rally that will suck in more traders.

Mick Weinstein gives us a good summary at yahoo finance .

The coming few weeks are earnings weeks which is where the market swings in different directions in one-two day intervals.

In my opinion we will see some back and forth in some target area until earnings season is over. The direction of the market will be decided once the earnings season comes to a halt.

Thoughts?