Thursday, March 26, 2009

Flat Correction In Progress

Today's rally looks very much like a b wave in a flat correction which at 2:40pm is showing signs of reversing on below average volume. If this is a flat correction, then we should expect the Dow to correct to the 7430 to 7524 area just below the Wednesday 3/35 intraday low. Unless the correction were to extend that may be the best area to enter the trend.

On the other hand if the Dow extends above today's high, then we may be looking at an ending diagonal which could mean a deeper correction to follow. Subsequent action will be key to the outlook.

As I stated last night I did go long on a breakout of the UWM today. I continue to look for opportunities to add positions as this trend develops without getting too far out on a limb before a correction ensues.

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