I’ve recently been seeing a prevalent view point about the market starting to sprout up, essentially that this past 9% correction is just like the June-July ‘09 correction, and that we should soon see new trend highs. I disagree with this view, and I’m betting that we’ll break 1040 soon.
Take a look at the /ES (S&P 500 e-mini futures) weekly chart above. Compare the volume on both corrections: the first correction had withering volume over 4 weeks, followed by equal or higher buying volume when the market blasted higher.
In the January ‘10 correction, we saw massively expanding volume on the downside, and withering volume on the upside progress. This tells me that the tide has shifted.
Even if we do make a new trend high, I will continue shorting into this strength based on the massive volume distribution we’ve seen. Good luck!