It is a little early to tell yet, but the action in the futures this morning would seem to indicate a break down out of the triangle pattern that has developed over the last two weeks. A number of indications can point us to the likelihood that the correction is over.
1 - Holding support at the 2007 of 55.07+/- or the Nov 2010 high of
2 - PPO of equity PCR falling to or below -20
3 - McClellan Oscillator reaching oversold levels - ratio adjusted
NYMO to -60 to -80 or traditional to -250 to -300
4 - A reversal in the VIX after a spike higher
5 - A spike lower in price with a reversal
6 - An IBD follow-through day
7 - A MACD buy signal off of support at above levels or
I would like to see at least two and preferably three indications that a bottom is in place before increasing long exposure. Depending on the nature of the actual pattern that has developed for the Qs, triangle or double zz, the down leg may only last two to four days.