We have a potential correction in progress. This was the first real red week since the breakout. If this is the start of a decent correction, here are two views of how they could play out.
1) The sideways correction.
Relieve the overbought conditions and just correct sideways in time with no severe price retracement, similar to the 2010 mid-rally correction.
2) A deeper price retrace.
I still think this cup-and-handle setup is a good potential also. Nice support at ~1300.
But like I have been saying the last several months and in the last several posts in particular, I still think the October low marked an important low and at that there are a number of reasons why I think looking for a major top here is incorrect. I believe this correction will be a dip that you want to buy in the longer term sense, that this cyclical bull market is still not over.
08/28/2014 Market Outlook (Bull Flag)
10 hours ago