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Friday, May 23, 2008

IBD Calls Market Correction

"Market in correction." That is what greeted me when I picked up my IBD yesterday afternoon, and I must admit I was surprised. There were none of the typical in between steps ("rally under pressure"). Now I think William O'Neill is all wet when it comes to politics, and he's pretty damn pollyanna about the economy, but his market calls are usually dead on, and I disbelieve them at my peril. So i'm not arguing. I have one remaining long position, and I'm tightening my stop.

The technology sector took the least whackage today, so the NDX was the strongest of the major indexes. This looks like it wants to find support at the 200dma.

The Russell still has a bit to go to hit it's 50dma. I would have waited until we broke previous lows before calling a correction, but Mr. O'Neill must see something I don't. I was going to give the current distribution day count, but that is no longer relavant.

I was wondering what the "magic level" would be where the market no longer ignored the price of oil. We may have found it.

The rally in the dollar is over, the only question is, can we get support at 72, or will we head for 71.50 again? If we break that, be prepared for all hell to break loose.

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