Typically, such a low is needed before we can actively start looking for an end to the correction.
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Though it is still much too early, I will watch to see if any short-term positive divergences are formed that will help us identify the end of the correction.
Is this beginning or the end of a correction?
FORBES: Wall Street: The Beginning or the End of a Correction?
As I noted last Thursday, it is my view that commodity correction should end this summer, providing a buying opportunity into what I see as a positive long-term trend.
The correction into the end of January held the 50% Fibonacci retracement support of the rally from the November lows to the January highs.
The next event a year ago was that the market topped out at the end of April into a correction, and that has now potentially become another similarity of this year.
This made a correction likely but not an end to the major uptrend.
Remember the correction of gold and silver back at the end of April last year?
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Remember the correction of gold and silver back at the end of April?
This thesis: an inventory correction in the chip industry is coming to an end.
FORBES: Chips: J.P. Morgan Turns Bullish; Upgrades TXN, XLNX, ONNN
Therefore, the coming correction should present a buying opportunity for higher prices into the end of the year.
"Going into the end of the first quarter, expectations got very high, so whether you call it a correction or an emotional rebalance, what investors are doing now is lowering their sights, " Mr. Ablin said.
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